For Immediate Release
Chicago, IL - May 3, 2012 - Zacks Research Equity Strategist
Sheraz Mian says that S&P 500 earnings for 1Q are impressive,
largely thanks to Apple. He tracks companies on the Zacks.com web
site, naming names, while forecasting trends for the months ahead.
Impressive 1Q (Thanks to Apple)
The first quarter 2012 earnings season has turned out to be way
better relative to pre-season expectations. And with about
two-thirds of the results already known, this reporting season is
also shaping up to be better than the fourth quarter of 2011. Most
of us suspected in the run up to the earnings season that the odds
of disappointing results were lower, given the extremely low
expectations. But hardly anyone of us could foretell how good the
earnings season has turned out to be, particularly at this late
stage of the earnings cycle.
Total earnings for the 67% of S&P 500 companies that have
already reported are up 6.9% from the same period last year.
Approximately 69% of the companies are coming ahead of
expectations, with the median surprise at a very good 3.8%. At this
stage in the previous quarter (4Q-11), total earnings for the same
companies were up 5.5%. Approximately 62% of these companies beat
expectations in the fourth quarter, with a median surprise of
Most of the earnings growth is coming from top-line gains, with
margins essentially flat from the year-earlier level. Revenues for
the companies that have already reported are up 5.7% year over
year, though only 39.5% have come out with positive revenue
surprises, with a median surprise of 1%.
As the Earnings Scorecard table below shows, the Tech and
Finance sectors have been major growth drivers, though overall
growth is fairly well dispersed, with half of the sixteen Zacks
sectors showing double-digit earnings growth.
The outsized earnings growth number for Construction is largely
a function of easier comparisons, as can be seen with results from
). But Construction is a much smaller sector within the S&P
500, accounting for about 0.50% of the index's market
capitalization and expected to contribute less than 0.30% of its
total earnings in 2012. Tech and Finance, on the other hand,
account for 19.5% and 14.9% of the index's market cap and will
contribute 19.2% and 17.8% of its total earnings in 2012,
Blowout results from
) no doubt play a major role in the Tech sector's strong
performance. Excluding Apple's results, the sector's earnings
growth drops to only 3.4% from the very impressive 21.8%. Earnings
growth for the 67% of companies that have already reported drop to
3.8% from 6.9%, once Apple's results are excluded.
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for information about the performance numbers displayed in this
Disclaimer: Past performance does not guarantee future results.
Investors should always research companies and securities before
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offer or solicitation to buy or sell any security.
Contact: Sheraz Mian
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