Goldman Sachs Group Inc (NYSE:GS) Portfolio Strategy Research released a report last Friday titled “U.S. Equity Views: S&P 500 4Q 2013 Earnings Update”. This report provides both an overview of S&P 500 (INDEXSP:.INX) earnings for the fourth quarter and updates for company for earnings next quarter from various market bellwethers.
S&P 500 positive earnings surprises
The Goldman Sachs Group Inc (NYSE:GS) report highlights the fact that the overall earnings season has been positive in terms of revenues for most companies. “More companies surprised positively on revenues than in a typical quarter. 43% of firms beat consensus sales expectations by more than one standard deviation (vs. 40-quarter average of 35%). But top-line beats have not translated to the bottom-line as earnings results were in line.”
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Others figures of note for 4Q earnings include the fact that 43% of firms beat consensus sales expectations by more than one standard deviation (compared to a 10-year average of just 35%). On the other side of the coin, only 11% of firms disappointed on sales by the same magnitude magnitude (compared to 20% on a 10-year basis).
Overall, S&P 500 (INDEXSP:.INX) companies beat consensus EPS estimates by 8.4%. If you take out accounting adjustments, then reporting companies only beat estimates by 3.3%.
Information technology sector boasts revenue growth
The Goldman Sachs Group Inc (NYSE:GS) report also points out that more than 75% of S&P 500 (INDEXSP:.INX) information technology companies beat consensus revenue figures in the fourth quarter. “Info Tech represents about 20% of reported companies, but 40% of revenue beats. The percentage of tech sales beats is at the 40-quarter high. The strength of revenue beats varied by company. While some firms noted stronger demand, several guided next quarter sales below consensus.”
A total of 62% of info tech companies surpassed earnings expectations last quarter.