The Apple of the Information Technology sector's eye

This past Tuesday, Apple reported actual EPS of $13.87, which was 37% above the mean EPS estimate and 116% above year-ago EPS. As a result, Apple is the largest contributor to earnings growth for the Information Technology sector in the S&P 500.

If Apple is removed from the sector, the blended earnings growth rate for the Information Technology sector drops to -2.9% from 11.9%. Apple is expected to continue to be a key contributor to earnings growth for the sector through the first half of 2012.

In fact, Apple is one of the largest contributors to earnings growth for the entire S&P 500 in Q4 2011. The blended earnings growth for the S&P 500 for the fourth quarter currently stands at 11.5%. If the final earnings growth rate is 11.5%, it will mark the ninth consecutive quarter of double-digit earnings growth for the index. However, AIG and Apple account for most of the earnings growth in the S&P 500 for the quarter.  If these two companies are excluded from the index, the Q4 2011 earnings growth rate for the S&P 500 drops from 11.5% to 1.0%.  Comparisons to weak year-ago earnings are driving the unusually high dollar-level growth for AIG, while strong results in Q4 2011 are driving the high dollar-level growth for Apple.

Of the 172 companies in the S&P 500 that have reported earnings to date, 65% have reported actual EPS above the mean EPS estimate. This percentage is below the average of 73% over the previous four quarters. Some the companies that reported significant upside earnings surprises during the past week include Apple, Boeing, and Caterpillar.

During the upcoming week, 91 companies in the S&P 500 index and three Dow components (Pfizer, ExxonMobil, and Merck) are scheduled to release earnings results.

Read more about the Q4 2011 earnings season in this week's edition of FactSet Earnings Insight.

All of the data used to compile FactSet Earnings Insight is available in the FactSet workstation.