Earnings for the first-quarter have turned into year-over-year growth, allaying initial fears that we may see recession-type declines.
With 97% or 397 of the companies listed on the S&P 500 index (SPX) already reporting earnings results, the aggregates blended EPS (earnings per share) growth was 0.15 percent through Tuesday midday. Included in this sum total are the reported estimates and EPS of those companies who have not yet reported, according to FactSet.
These first-quarter earnings results have turned the year-to-year growth around which in turn has allayed initial fears of recession-type declines.
This is a noticeable improvement from average estimates of a 4.7% decline, which would have seen the biggest drop since Q3 2009.
The utilities sector (XLU) has produces the biggest surprise which managed to swing to growth of 4.9% as of Tuesday midday from initially expecting a 5.8% decline, according to FactSet. Another huge contributor to this overall improvement was the health sector (XLV), as the estimated growth nearly doubled from an initial 11.5% to 22.5%, according to data provided by FactSet’s senior earnings analyst John Butters.
Even the worst sector, energy (XLE), has managed to show improvements from an initial 64.5% drop estimate to a 57.5% decline.
With the earnings reports turning out better than expected, it has really helped to improve the stocks outlook as well as investor sentiment.
During the March month, the S&P 500 index shed 1.7%, as investors prepared for an earnings recession. From March’s 1.7% drop, the S&P 500 has increased by 1.6%, within 1% of closing high records.
However, blended Q1 estimates for revenue declined slightly worse at 2.7% from the estimated 2.6% decline.