S&P 500 Earnings Season Latest Update: 87% of index companies have reported results for Q2 2022

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By John Butters

The number of S&P 500 companies reporting positive earnings surprises and the magnitude of these earnings surprises continued to rise over the past week. As a result, the earnings growth rate for the second quarter is higher today compared to the end of last week and compared to the end of the quarter.

However, both the number and magnitude of positive earnings surprises are still below their five-year averages.

Overall, 87% of the companies in the S&P 500 have reported actual results for Q2 2022 to date. Of these companies, 75% have reported actual EPS above estimates, which is above last week’s percentage of 73% but below the five-year average of 77%.

Positive earnings surprises reported by companies in multiple sectors (led by the Energy and Health Care sectors) were responsible for the increase in the earnings growth rate over the past week. Upward revisions to EPS estimates and positive earnings surprises for companies in the Energy sector have been the largest contributors to the overall increase in the earnings growth rate for the index since the end of the second quarter (June 30).

If 6.7% is the actual growth rate for the quarter, it will mark the lowest earnings growth rate reported by the index since Q4 2020 (4.0%). Six of the 11 sectors are reporting year-over-year earnings growth, led by the Energy, Industrials, and Materials sectors. On the other hand, five sectors are reporting a year-over-year decline in earnings, led by the Financials, Consumer Discretionary, and Communication Services sectors.

In terms of revenues, 70% of S&P 500 companies have reported actual revenues above estimates, which is above the five-year average of 69%.

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Positive revenue surprises reported by companies in multiple sectors (led by the Energy and Health Care sectors) were responsible for the increase in the revenue growth rate over the past week.

If 13.6% is the actual growth rate for the quarter, it will mark the sixth-straight quarter of year-over-year revenue growth above 10% for the index. All 11 sectors are reporting year-over-year growth in revenues, led by the Energy sector.

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Looking Ahead
Looking ahead, analysts expect earnings growth of 5.8% for Q3 2022 and 6.1% for Q4 2022. For CY 2022, analysts are predicting earnings growth of 8.9%.

The forward 12-month P/E ratio is 17.5, which is below the five-year average (18.6) but above the 10-year average (17.0).

During the upcoming week, 23 S&P 500 companies (including one Dow 30 component) are scheduled to report results for the second quarter.

(The author is Vice President and Senior Earnings Analyst at FactSet)