CHICAGO, Jan. 9, 2014 /PRNewswire/ -- Zacks Director of Research Sheraz Mian says, "The real Q4 earnings story is not about the 18 companies that have reported already, but the remaining 482 companies."
Q4 Earnings Season Gets Underway
We are still a couple of weeks away from getting into the heart of 2013 Q4 earnings season. But the reporting cycle has gotten underway, with results from 18 S&P 500 companies out already. Even though these early reports from companies with fiscal quarters ending in November include a few industry leaders like Oracle (NYSE: ORCL-Free Report), FedEx (NYSE: FDX-Free Report) and Nike (NYSE: NKE-Free Report), we can't draw any firm conclusions from what we have seen thus far.
The real Q4 earnings story is not about the 18 companies that have reported already, but the remaining 482 companies. And as we have been seeing repeatedly over the past year or so, estimates have come down sharply as the quarter unfolded. The current expected Q4 total earnings growth for the S&P 500 of +6.3% is down quite a bit over the last three months.
The actual earnings growth rate in Q4 will most certainly be higher than the +6.3% expected at this stage, a function of management's highly refined expectations management game (more on that a little later). But even this growth rate will be the highest quarterly growth pace of 2013.
The chart above is a picture of accelerating growth. But looks could be deceiving, as the stronger-looking Q4 growth pace is primarily a function of easy comparisons, particularly for the Finance sector. Bank of America (NYSE: BAC-Free Report) has a roughly $2 billion positive swing in its total earnings and many insurers like Chubb (NYSE: CB-Free Report), among others don't have to deal with the type of catastrophic losses they suffered in the 2012 East Coast storms. Outside of Finance, total earnings growth for the S&P 500 drops to +3.5%.
Want stock picks from Zacks Equity Research that are based on earnings estimates? Subscribe to the free "Profit from the Pros" newsletter: Click here
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.