With SPX constituent earnings set to crescendo over the next couple of weeks, below we provide a quick look at early earnings trends across the S&P500
Beat-Miss: We’re currently running on par with 2Q13 results with ~54% and ~70% of companies beating top and bottom line estimates, respectively.
Style Factor Performance: On balance, earnings results have tracked style factor price performance with small cap, lower yield, higher growth companies performing better vs prevailing expectations while Higher Yield, Lower Beta/Short Interest/Leverage companies are coming in on the wrong side of sales growth estimates.
Fundamental Performance: Mixed results here with only ~50% of companies reporting registering sequential acceleration in sales or earnings growth. Margin performance has been slightly worse with >50% of companies reporting sequential margin contraction. Peak margins/corporate profitability and largely exhausted cost leverage will remain an ongoing fundamental overhang.
From a sector perspective, Healthcare, Financials, & Consumer Discretionary are the fundamental laggards while Materials, Tech and Energy are reflecting improving sales/earnings growth trends.
Enjoy the weekend.
*Note: Prices/Data as of 10/17/13 close
Christian B. Drake