With 98% of US S&P 500 companies having reported earnings for the March quarter, Mason Stevens Head of Equities, Marcus Tuck, provides his key takeaways:
- Aggregate profit growth was a very healthy 13.9%, the highest year-on-year growth since Q3 2011, where it recorded a 16.7% growth rate.
- 10 of 11 sectors reported profit growth with only Telecom Services recording a decline.
- Revenue growth has accelerated. Sales growth for Q1 2017 was 7.7%.
- 75% of companies reported EPS above consensus EPS estimates.
- The three sectors we (UGC) are significantly overweight, being Information Technology (84%), Healthcare (83%) and Financial (82%) provided the most companies delivering consensus estimate beats.
- On average, reported EPS surprised to the upside by 5.8%.
- 11 of 30 Dow companies provided revenue growth numbers for Europe in the first quarter. Of these, 5 reported year-on-year growth in European revenues. This was the highest number of Dow 30 companies to report revenue growth in Europe since Q3 2014.
- Analysts expect earnings growth of 10.0% and revenue growth of 5.4% for the full year 2017. With both those numbers below the Q1 run rates, it leaves open the possibility of further upgrades if growth doesn’t falter.
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The information contained in this article is General in nature and has been prepared without taking into account your objectives, financial situation and needs. When assessing any investment you should also consider that past performance is not a reliable indicator of future performance.