S&P 500 EPS Estimate Drops Only 2.9% For Q3

Updated on

S&P 500 EPS Estimate Drops Only 2.9% for Q3 by John Butters, Senior Earnings Analyst – FactSet

During the third quarter, analysts lowered earnings estimates for companies in the S&P 500 for the quarter. The Q3 bottom-up EPS estimate (which is an aggregation of the EPS estimates for all the companies in the index) dropped by 2.9% (to $29.76 from $30.65) during the quarter. How significant is a 2.9% decline in the bottom-up EPS estimate during a quarter? How does this decrease compare to recent quarters?

Related: S&P 500 Tech Companies Most Positive for Q3

During the past year (four quarters), the average decline in the bottom-up EPS estimate during a quarter has been 4.9%. During the past five years (20 quarters), the average decline in the bottom-up EPS estimate during a quarter has been 4.3%. During the past 10 years, (40 quarters), the average decline in the bottom-up EPS estimate during a quarter has been 5.6%. Thus, the decline in the bottom-up EPS estimate recorded during the third quarter was smaller than the one-year, five-year, and 10-year averages.

EPS Estimates Down, S&P 500 Value Up

As the bottom-up EPS estimate declined during the quarter, the value of the S&P 500 increased during this same time frame. From June 30 through September 29, the value of the index increased by 2.5% (to 2151.13 from 2098.86). Assuming the market does not close at or below 2098.86 today, the third quarter will mark the sixteenth time in the past 20 quarters in which the bottom-up EPS estimate decreased during the quarter while the value of the index increased during the quarter.

[drizzle]

S&P 500 EPS Estimate

At the sector level, the Energy sector witnessed the largest percentage decline in the bottom-up EPS estimate at -30.7% (to $1.49 from $2.15). Similar to the index as a whole, the value of the S&P 500 Energy sector also increased (slightly) as the bottom-up EPS estimate decreased. From June 30 through September 29, the value of the S&P 500 Energy sector increased by 0.3% (to 513.68 from 512.39).

Read more about earnings trends in this edition of FactSet Earnings Insight. Visit www.factset.com/earningsinsight to launch the latest report.

Do you know which under-the-radar stocks the top hedge funds and institutional investors are investing in right now? Click here to find out.

Receive stories like this to your inbox as they are published. Subscribe by e-mail and follow @FactSet on Twitter. If you are looking to source FactSet data or analytics in your publication, email [email protected].

© Copyright 2000 – 2016 FactSet Research Systems Inc.

[/drizzle]

Signup to ValueWalk!

Get the latest posts on what's happening in the hedge fund and investing world sent straight to your inbox! 
This is information you won't get anywhere else!