Third-Quarter Earnings Review

Bespoke Investment Group LLC has an interesting review of third-quarter earnings reports on its website.  I have reproduced the relevant portion below.  Keep in mind that third-quarter earnings estimates had been drastically lowered across the board, so for a company to miss even the newly revised estimates is a sobering reflection of how much the economy has slowed already.

Third Quarter Earnings Season: 20% Finished

As of last Friday, about 20% of S&P 500 companies had released third quarter earnings reports.  Below we provide a brief summary of how various sectors have performed versus expectations.  As shown, Financials and Consumer Staples are the furthest along in terms of how many companies have reported.  No Telecom or Utilities stocks in the S&P 500 have reported Q3 earnings yet.

Of the 13% of Materials stocks that have reported, 100% have beaten estimates.  Technology, Health Care and Industrials are the other three sectors that are beating at a higher rate than the 57% for the entire S&P 500.  The Consumer Discretionary sector has been the weakest thus far, with just 44% of companies beating estimates.

On the negative side, Financials currently have the highest earnings miss rate at 40%, followed by Consumer Discretionary at 31%.  The entire index currently has a Q3 miss rate of 26%.

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