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Industrial Stocks Lag while Tech Stocks Outperform so far for 3Q2018 Earnings

Oct 22, 2018

 

  • 3Q2018 earnings season is in full swing this week with 153 companies in the S&P 500 reporting earnings this week. So far for 3Q2018, 84 companies in the S&P 500 have reported earnings. 
     
  • Of the 84 companies in the S&P 500 that have reported earnings, 80% have beat consensus expectations. As a whole, the S&P 500 has reported a 7.2% EPS surprise and 6 companies have reported y/y EPS growth greater than 100%.
     
  • Within the S&P 500, financial stocks have reported the most with 25 of the 67 companies in the S&P 500 financial sector having already reported earnings. 72% of financial stocks in the S&P 500 to report earnings have managed to beat consensus expectations while 12% have reported earnings below consensus expectations and 16% have reported EPS in-line with consensus expectations. The 26 financial stocks to report 3Q2018 earnings have averaged an EPS surprise of 5.3%.  
     
  • The S&P 500 industrials sector appears to be the biggest laggard of S&P 500 with 18% of industrial companies in the S&P 500 reporting 3Q2018 earnings below expectations. 17 of the 70 stocks in the S&P 500 industrials sector have reported earnings so far and averaged an EPS surprise of 2.6% -- 76% of industrial stocks in the S&P 500 have managed to beat consensus 3Q2018 EPS expectations while the remaining 6% have reported EPS in-line with consensus expectations.  
     
  • Tech stocks appear to be the top-performing sector within the S&P 500 this earnings season as all 10 companies that have reported 3Q2018 earnings beat consensus EPS expectations. The 10 tech stocks in the S&P 500 to report 3Q2018 earnings have averaged an EPS surprise of 3.3% -- 55 tech stocks in the S&P 500 have yet to report 3Q2018 earnings.  
     
  • Going forward, analysts expect the most robust growth from the 31 stocks in the S&P 500’s energy sector with 3Q2018 consensus estimates calling for 90.77% y/y EPS growth -- so far, 2 energy stocks in the S&P 500 have reported earnings, generating an average EPS surprise of 1.1%.  

 

Sector Above Consensus Matching Consensus Below Consensus Average EPS Surprise Companies Reported Companies in Index
Communication                                 -                                         -                                   -                                           -   0 20
Consumer Discretionary  91% 9% 0% 6.7% 11 66
Consumer Staples 89% 0% 11% 4.0% 9 32
Energy 50% 50% 0% 1.1% 2 31
Financials 72% 16% 12% 5.3% 25 67
Healthcare 80% 20% 0% 2.5% 5 64
Industrials 76% 6% 18% 2.6% 17 70
Information Technology 100% 0% 0% 3.3% 10 65
Materials 0% 0% 100% -0.6% 2 24
Real Estate 100% 0% 0% 31.8% 3 32
Utilities                                 -                                         -                                   -                                           -   0 29
Total S&P 500 80% 10% 11% 7.2% 84 500