As of today, 74 companies in the S&P 500 have reported actual earnings and sales numbers for the second quarter. Of these 74 companies, 73.0% have reported sales above estimates and 30.0% have reported sales below estimates. How does this 73.0% number compare to recent averages?
During the past year (4 quarters), 55.3% of the companies in the S&P 500 have reported sales above the mean estimate on average. During the past four years (16 quarters), 57.2% of companies in the S&P 500 have reported sales above the mean estimate on average. Thus, the percentage of companies reporting sales above estimates to date for Q2 2014 is running well above both the trailing 1-year trailing and 4-year averages.
If 73.0% is the final percentage for the quarter, it will mark the highest percentage of companies
reporting sales above estimates since FactSet began tracking the data in Q3 2008. The current record for the highest percentage for a quarter is 71.5%, set in Q2 2011.
Companies are also beating revenue estimates by wider margins than average. In aggregate, companies are reporting actual sales that are 1.43% above expectations. This percentage is well above the trailing 1-year average (+0.58%) and 4-year average (+0.57%).
Despite the upside surprises, there has been no improvement in the overall revenue growth rate for the S&P 500 since the beginning of the earnings season. On June 30, the estimated revenue growth rate for Q2 was 3.0%. As of today, the blended revenue growth rate stands 3.0%. The revenue growth rate has remained stagnant because downward revisions to revenue estimates for companies in the Energy sector have offset the increases in revenue growth rates in other sectors (particularly in the Financials, Information Technology, and Health Care sectors) due to upside sales surprises. Please see page 13 for more details on the sector-level changes in revenue growth since June 30.