3Q Earnings Scorecard -- which sectors are outperforming and which ones are most optimistic

We're pretty well along into earnings season and this is a good time to take stock of how the numbers are stacking up.

Below is a table that lists each sector shows the results as of Tuesday's earnings reports:

Sector	Earnings Beats	Y-o-Y Earnings Increases	Y-o-Y Revenue Increases	Upside Guidance	Total Providing Guidance	Total Number of Stocks Reporting
Basic Industries	24	26	35	5	13	40
Capital Goods	51	51	51	15	34	59
Consumer Durables	36	34	38	9	28	46
Consumer Non-Durables	26	28	29	6	14	34
Consumer Services	44	47	49	6	35	69
Energy	23	18	22		6	31
Finance	80	70	36	4	9	106
Health Care	25	25	36	8	25	43
Miscellaneous	13	10	11	1	10	15
n/a	1	1	1		1	1
Public Utilities	20	18	20	4	13	26
Technology	95	94	106	19	72	121
Transportation	17	27	25	1	3	27
Grand Total	455	449	459	78	263	618

A cursory glance gives the impression this earnings season has been pretty decent. The next table makes things a lot clearer.

This following table converts the numbers above into percentages:

Sector	% Upside Guidance	% Earnings Beats	% Y-o-Y Earnings Increases	% Y-o-Y Revenue Increases
Basic Industries	38%	60%	65%	88%
Capital Goods	44%	86%	86%	86%
Consumer Durables	32%	78%	74%	83%
Consumer Non-Durables	43%	76%	82%	85%
Consumer Services	17%	64%	68%	71%
Energy	0%	74%	58%	71%
Finance	44%	75%	66%	34%
Health Care	32%	58%	58%	84%
Miscellaneous	10%	87%	67%	73%
n/a	0%	100%	100%	100%
Public Utilities	31%	77%	69%	77%
Technology	26%	79%	78%	88%
Transportation	33%	63%	100%	93%
Grand Total	30%	74%	73%	74%

In percentage terms, this earnings season looks quite strong. Looking at the Grand Total line, aggregate numbers are definitely good.

Looking at the individual sectors (and leaving out Miscellaneous and n/a), Capital Goods has had the most earnings beats followed by a group of sectors in the high 70% range including Tech, Consumer Durable, Consumer Non-Durables and Utilities.

Similarly to last quarter, the high percentage of revenue increases shows that the earnings increases are not primarily due to cost cutting.

Another interesting fact is related to Upside Guidance. Where we had Tech providing so much upside guidance last quarter, this quarter the Tech number is merely 26%. Most surprising to me is that one of the highest percentages is in Finance sector. While the banks bellyache about the new Dodd-Frank financial regulation laws, many are predicting better times ahead. Looking further across the Financial line, it jumps out that almost twice as many companies had earnings increases than had revenue increases. I suspect that in many cases this is the result of simply reducing bad loan reserves, not any increase in profitable business.

So looking back on the 3rd quarter, the majority of companies seem fairly healthy. Looking ahead based on forward guidance, things look a little anemic. The optimism of the Financials stands in contrast to the conservative outlook of Tech, for example. Time will tell which sector outperforms next quarter.

Disclosure: none