S&P 500's Industrials sector manufactures high earnings growth for 2012

The blended earnings growth rate for Q4 2011 stands at 5.5%, unchanged from last week. Upside earnings surprises from companies such as Comcast and DIRECTV were offset by a downside earnings surprise from CenturyLink, resulting in no change in the growth rate.

Of the 401 companies in the S&P 500 that have reported earnings to date, 68% have reported actual EPS above the mean EPS estimate. This percentage is below the average of 73% over the previous four quarters.

At the sector-level, the Industrials sector has the second-highest earnings growth rate of any sector at 12.6%. Over the next three quarters, the Industrials sector is projected to have some of the highest earnings growth rates (between 8% and 10%) of any sector during this time frame.

While the Industrials sector was a solid contributor to earnings growth for Q4 2011, it is important to note that two companies account for most of the earnings growth in the S&P 500 for the quarter: Apple and AIG.  If these two companies are excluded from the index, the Q4 2011 earnings growth rate for the S&P 500 drops from 5.5% to 0.8%. 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.

The upcoming week will be the final “peak week” for the Q4 2011 earnings season, as the last four companies in the DJIA and 55 companies in the S&P 500 are scheduled to announce 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.

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