CHICAGO, Nov. 14, 2014 /PRNewswire/ -- Zacks Director of Research Sheraz Mian says, "Some metrics are showing an improvement, such as a modestly bigger ratio of companies is beating earnings estimates and the revenue growth rate appears to have picked up. But other metrics are showing weakness."
Q3 Earnings Season in Final Stretch
With more than 91% of Q3 results already on the books, the picture emerging from this reporting cycle is decent enough; it's not great, but it's not bad either.
In terms of growth rates, beat ratios and guidance, it's a mixed bag when Q3 results are viewed in the context of other recent periods. Some metrics are showing an improvement, such as a modestly bigger ratio of companies is beating earnings estimates and the revenue growth rate appears to have picked up. But other metrics are showing weakness, such as the relatively lower earnings growth rate and the fewer positive revenue surprises.
The guidance picture is no different from what we have been seeing in recent quarters, with a majority of the companies providing guidance guiding lower. As a result, estimates for the current quarter (2014 Q4) are following the all-too-familiar pattern of sliding down.
In some aspects, the negative revisions trend for the current quarter is somewhat more pronounced than what we had seen at a comparable stage in the preceding reporting cycle.
Q3 Earnings Scorecard (as of November 13th, 2014)
Including this morning's earnings announcements, we now have Q3 results from 461 S&P 500 members that combined account for 95.1% of the index's total market capitalization. Total earnings for these 461 companies are up +6.9% from the same period last year on +4.1% higher revenues, with 70.9% beating EPS estimates and 56.8% coming out with positive revenue surprises.
The earnings and revenue growth performance for these 461 companies (+6.9% for earnings and +4.1% for revenues) are below what we got from these same companies in Q2, but compare favorably to the respective 4-quarter averages. With respect to surprises, the earnings and revenue beat ratios are following divergent paths, with earnings surprises notably more widespread while revenue surprises a little hard to come by.
The focus lately has been on the Retail sector, with results overall coming on the weak side. But it seems like expectations were even weaker; what else will explain the market's reaction to the sub-par Macy's (NYSE:M-Free Report) report. On the positive side,Wal-Mart's (NYSE:WMT-Free Report) commentary was reassuring following their recent negative pre-announcement. But their determination to be even more competitive this holiday season will make it tougher for others in the retail space.
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.
About Zacks
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.
Get the full Report on M - FREE
Get the full Report on WMT - FREE
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.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
[email protected]
http://www.zacks.com
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.
Logo - http://photos.prnewswire.com/prnh/20101027/ZIRLOGO
SOURCE Zacks Investment Research, Inc.
Related Links
WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?
Newsrooms &
Influencers
Digital Media
Outlets
Journalists
Opted In
Share this article