Information

We use cookies to personalize content and ads and to analyze our traffic.
We also share information about your use of our site with our advertising and analytics partners. See details.

We use cookies to personalize content, ads, analyze traffic and share information about your use of our site. See details.

Home
|
|
|
Events
|
Press Releases
|
Subscribe
Type
Thought Leadership
Product Insight
Subscribe
Market and Economics
Portfolio and Risk Analysis
Companies and Earnings
Shareholder Distributions
ETFs
Fixed Income
Hedge Funds
M&A and Corporate Activism
Market Summaries
Category
Fact Sheets
Tools and Tips
Webcasts
White Papers

For Q3, Smaller Cuts to S&P 500 Earnings Estimates Than Average

By John Butters, Senior Earnings Analyst
Jul 31, 2015

During the month of July, analysts lowered earnings estimates for companies in the S&P 500 for the third quarter. The Q3 bottom-up EPS estimate (which is an aggregation of the estimates for all the companies in the index) dropped by 1.5% (to $29.58 from $30.03) during the month. How significant is a 1.5% decline in the bottom-up EPS estimate during the first month of the quarter? How does this decrease compare to recent quarters?

During the past year (four quarters), the average decline in the bottom-up EPS estimate during the first month of the quarter has been 3.2%. During the past five years (20 quarters), the average decline in the bottom-up EPS estimate during the first month of the quarter has been 1.6%. During the past 10 years, (40 quarters), the average decline in the bottom-up EPS estimate during the first month of the quarter has been 2.0%. Thus, the decline in the bottom-up EPS estimate recorded during the course of the first month (July) of the third quarter was lower than the 1-year, 5-year, and 10-year averages.

In terms of price, the value of the S&P 500 has increased by 2.2% (to 2108.63 from 2063.11) during the month of July. Assuming the S&P 500 finishes the day with a value above 2063.11, this quarter will mark the tenth time in the past 16 quarters that the bottom-up EPS estimate decreased during the first month of the quarter while the price of the index increased during the first month of the quarter.

For these 10 quarters (including Q3 2015), the average decrease in the bottom-up EPS estimate during the first month of the quarter was 2.4%, while the average increase in price during the first month of the quarter was 4.1%.

Read more about earnings trends in this edition of FactSet Earnings Insight. Visit www.factset.com/earningsinsight to launch the latest report.

Receive stories like this to your inbox as they are published. Subscribe by e-mail and follow @FactSet on Twitter. If you are looking to source FactSet data or analytics in your publication, email media_request@factset.com.

© Copyright 2000 - FactSet Research Systems Inc.