Skip to main content

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

Comments

Popular posts from this blog

Running TradeRadar on Windows 7 and Windows 8

Development of the original TradeRadar Stock Inspector software was begun back in the days before Windows 7 and Windows 8 were available.

As these newer versions of Windows have become more popular, we have heard from some users that they are having problems installing and running TradeRadar on their newer PCs.

The good news is that TradeRadar will work just fine on Windows 7 and Windows 8. All you have to do is adjust the Windows Compatibility Settings to ensure TradeRadar runs as intended.

It is recommended that you can apply Compatibility Settings when running the initial installation; however, it is also possible to apply Compatibility Settings after the program has been installed.

Prior to installation
After downloading the install program, go to the folder where you have stored the TradeRadarStkInsp_7_Setup.exe or TradeRadarStkInsp_7_PRO_Setup.exe executable. Right-click on the executable file and select Properties. Click the Compatibility tab. Adjust the Compatibility mode to …

Unlock Stock Market Profits - Key #1

This is the first in an ongoing series of articles where I discuss what I feel are keys to successful investing. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. (Click here to read the original post)

There are two basic steps to investing. First, you need to find stocks that seem to have some potential. Then you have to determine whether these stocks are actually good investments. There are many stocks that at first glance look interesting, but further research reveals that there are too many negatives to warrant taking a position.

This first post in the series starts at the beginning: getting good investment ideas.

Key #1: If something special is happening to a stock, it will be reflected in some kind of unusual activity in the markets.

As individual investors, we will never be the first to know; however, unusual activity can be an early sign that allows us to follow the Wall Street professionals and …

Unlock Stock Market Profits - Key #4

This is the fourth article in a series of posts describing 10 tools to help you identify and evaluate good investing ideas. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. (Click here to read the original post)

With this fourth post, we will continue another step along the path of finding stocks that seem to have some potential. The first post in the series discussed how to use unusual activity to identify investing ideas. The second post described how to use stock screeners. The third post described how to use lists of new highs and new lows. This post will focus on identifying social or business trends in order to find investing ideas.

Information on new trends might turn up anywhere. In conversation with friends or business associates, in newspapers or magazines, on TV or though your work. The key is to be aware of trends and how they start, stop or change. We'll start by describing what to lo…