Zacks Earnings Trends Highlights: Bank of America, Verizon and Travelers
CHICAGO, Jan. 31, 2014 /PRNewswire/ -- Zacks Director of Research Sheraz Mian says, "In some respects, the Q4 earnings season is an improvement over the last few quarters."
Strong Q4 Earnings, but 2014 Estimates Coming Down
With respect to the Scorecard for 2013 Q4, we have seen results from 219 S&P 500 members accounting for 58% of the index's total market capitalization. Total earnings for these 219 companies are up +12.0% from the same period last year, with 70.8% beating earnings expectations with a median surprise of +3.0%. Total revenues for these companies are up +1.8%, with 51.1% beating revenue expectations with a median surprise of +1.0%.
The +12.0% 'headline' total earnings growth rate definitely looks fairly robust, particularly when compared to the growth rate for this same group of 219 companies in the last few quarters. Easy comparisons for three companies – Bank of America (NYSE: BAC-Free Report), Verizon (NYSE: VZ-Free Report) and Travelers (NYSE: TRV-Free Report) – account for a big part of the strong Q4 earnings growth. Exclude these three and total earnings growth for the S&P 500 companies that have reported drops by half. Performance on the revenue front is modestly below what we have been seeing in recent quarters, but not by much.
The composite picture for Q4 – combining the results for the 219 companies that have reported already with the 281 still to come – is for earnings growth of +9.6% on +0.7% higher revenues and 79 basis points higher margins. This will be the highest quarterly growth pace of 2013, with easy comparisons playing a non-trivial role propping up the growth rate. But it's not all easy comparisons, as total earnings for the index are on track to reach a new all-time quarterly record.
Trends on the estimate revision front have been negative for a while, but we could afford to overlook such details in the Fed-inspired rally. It will be interesting to see if investors will continue to shrug estimate cuts in the post-QE world.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term. Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Click here to subscribe to this free newsletter today.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks Investment Research
800-767-3771 ext. 9339
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
SOURCE Zacks Investment Research, Inc.
More by this Source
The Zacks Analyst Blog Highlights:Coca-Cola, Sony, Visa, Ambev and Banco Itau
Mar 07, 2014, 09:30 ET
Browse our custom packages or build your own to meet your unique communications needs.
Learn about PR Newswire services
Request more information about PR Newswire products and services or call us at (888) 776-0942.