July 31, 2020

This Week in Earnings 20Q2 | Jul 31

by David Aurelio.

Last Update: Jul 31, 2020

To download the full This Week in Earnings report click here.

Please note: if you use our earnings data, please source I/B/E/S data from Refinitiv

Aggregate Estimates and Revisions

  • 20Q2 earnings are expected to be -33.8% from 19Q2. Excluding the energy sector, the earnings growth estimate is -27.3%.
  • Of the 312 companies in the S&P 500 that have reported earnings to date for 20Q2, 82.1% have reported earnings above analyst expectations. This compares to a long-term average of 65% and prior four quarter average of 71%.
  • 20Q2 revenue is expected to be -10.4% from 19Q2. Excluding the energy sector, the growth estimate is -6.1%.
  • During the week of August 3, 132 S&P 500 companies are expected to report quarterly earnings.

20Q2 Earnings Growth Highlights

The estimated earnings growth rate for the S&P 500 for 20Q2 is -33.8%. If the energy sector is excluded, the growth rate improves to -27.3%. The S&P 500 expects to see share-weighted earnings of $221.7B in 20Q2, compared to share-weighted earnings of $334.8B (based on the year-ago earnings of the current 505 constituents) in 19Q2.

Three of the 11 sectors in the index expect to see an improvement in earnings relative to 19Q2. The utilities and information technology sectors have the highest earnings growth rates for the quarter, while the energy sector has the weakest anticipated growth compared to 19Q2.

The utilities sector has the highest earnings growth rate (2.7%) of any sector. It is expected to earn $9.6B in 20Q2, compared to earnings of $9.4B in 19Q2. Three of the five sub-industries in the sector are anticipated to see higher earnings than a year ago. The multi-utilities (14.6%) and gas utilities (11.8%) sub-industries have the highest earnings growth in the sector. If these sub-industries are removed, the growth rate declines to -1.4%.

The information technology sector has the second highest earnings growth rate (1.4%) of any sector. It is expected to earn $60.7B in 20Q2, compared to earnings of $59.9B in 19Q2. Six of the 13 sub-industries in the sector are anticipated to see higher earnings than a year ago. The semiconductor equipment (31.2%) and application software (30.5%) sub-industries have the highest earnings growth in the sector. If these sub-industries are removed, the growth rate declines to -0.6%.

The energy sector has the lowest earnings growth rate (-170.2%) of any sector. It is expected to earn $-10.7B in 20Q2, compared to earnings of $15.3B in 19Q2. All five sub-industries in the sector are anticipated to see lower earnings than a year ago. The integrated oil & gas (-210%) and oil & gas exploration & production (-171.5%) sub-industries have the lowest earnings growth in the sector. If these sub-industries are removed, the growth rate improves to -120.9%.

20Q3 Earnings Growth Highlights

The estimated earnings growth rate for the S&P 500 for 20Q3 is -23.1%. If the energy sector is excluded, the growth rate improves to -19.7%. The S&P 500 expects to see share-weighted earnings of $264.6B in 20Q3, compared to share-weighted earnings of $344.0B (based on the year-ago earnings of the current 505 constituents) in 19Q3.

None of the 11 sectors in the index expect to see an improvement in earnings relative to 19Q3. The information technology and utilities sectors have the highest earnings growth rates for the quarter, while the energy sector has the weakest anticipated growth compared to 19Q3.

The information technology sector has the highest earnings growth rate (-1.6%) of any sector. It is expected to earn $63.9B in 20Q3, compared to earnings of $64.9B in 19Q3. Five of the 13 sub-industries in the sector are anticipated to see higher earnings than a year ago. The semiconductor equipment (29.6%) and systems software (11.1%) sub-industries have the highest earnings growth in the sector. If these sub-industries are removed, the growth rate declines to -5.7%.

The utilities sector has the second highest earnings growth rate (-2.3%) of any sector. It is expected to earn $13.9B in 20Q3, compared to earnings of $14.2B in 19Q3. Two of the five sub-industries in the sector are anticipated to see higher earnings than a year ago. The gas utilities (7%) and water utilities (2.7%) sub-industries have the highest earnings growth in the sector. If these sub-industries are removed, the growth rate declines to -2.4%.

The energy sector has the lowest earnings growth rate (-104.6%) of any sector. It is expected to earn -$0.6B in 20Q3, compared to earnings of $13.6B in 19Q3. All five sub-industries in the sector are anticipated to see lower earnings than a year ago. The oil & gas exploration & production (-133.6%) and integrated oil & gas (-114.8%) sub-industries have the lowest earnings growth in the sector. If these sub-industries are removed, the growth rate declines to -81.4%.

Exhibit 1: S&P 500: Estimate Revisions by Sector

Exhibit 2: S&P 500: Estimate Revisions History

Source: I/B/E/S data from Refinitiv

Exhibit 3: All U.S. Companies: Estimate Revisions by Sector

Exhibit 4: All U.S. Companies: Estimate Revisions History

Source: I/B/E/S data from Refinitiv

Interested in learning how you can use the StarMine SmartEstimate® and Predicted Surprise® to avoid earnings misses and find earnings beats? Learn more here.

Each week the StarMine Earnings Surprise Forecast is published as part of the This Week in Earnings report. The forecast shows the S&P 500 companies with significant positive and negative Predicted Surprises expected to report over the next two weeks. Don’t be surprised when your holdings show up in This Week in Earnings, learn how to use Eikon from Refinitiv’s Screener app to see these companies ahead of publication here.

Additional index earnings reports on Lipper Alpha Insight:

Russell 1000 Earnings Dashboard

Russell 2000 Earnings Dashboard

S&P 500 Earnings Dashboard

S&P 400 MidCap Earnings Dashboard

S&P 600 SmallCap Earnings Dashboard

TSX Composite Earnings Dashboard

STOXX 600 Earnings Outlook

Eikon from Refinitiv is a complete solution for research and analytics. It places the most comprehensive market information, news, analytics and trading tools available into a desktop as simple to use as the Internet. Eikon from Refinitiv clients can run fundamental and technical screens against a global dataset representing more than 100 countries and over 200,000 securities.

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