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:
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:
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
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
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