S&P500 Earnings Trends – February 2017

S&P500 earnings trends and estimates are a notably important topic, for a variety of reasons, at this point in time.

FactSet publishes a report titled “Earnings Insight” that contains a variety of information including the trends and expectations of S&P500 earnings.

For reference purposes, here are two charts as seen in the “Earnings Insight” (pdf) report of February 10, 2017:

from page 19:

(click on charts to enlarge images)

S&P500 earnings trends

from page 20:

S&P500 annual earnings

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RevSD, LLC offers the above data and projections for informational purposes only, and does not necessarily agree with information provided by these outside parties.

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ProfitabilityIssues.com is published by RevSD, LLC (RevSD.com).  RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future business conditions, and given these conditions, offers corporations and businesses advice, strategies, and actionable methods on how to optimally increase revenues and profitability.

S&P500 Annual EPS – Forecast Years Of 2016 Through 2018

As many are aware, Thomson Reuters publishes earnings estimates for the S&P500.

The following estimates are from Exhibit 20 of the “S&P500 Earnings Scorecard” (pdf) of February 16, 2017, and represent an aggregation of individual S&P500 component “bottom up” analyst forecasts.  For reference, the Year 2014 value is $118.78/share and the Year 2015 value is $117.46:

Year 2016 estimate:

$118.35/share

Year 2017 estimate:

$131.35/share

Year 2018 estimate:

$147.19/share

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RevSD, LLC offers the above data and projections for informational purposes only, and does not necessarily agree with information provided by these outside parties.

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ProfitabilityIssues.com is published by RevSD, LLC (RevSD.com).  RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future business conditions, and given these conditions, offers corporations and businesses advice, strategies, and actionable methods on how to optimally increase revenues and profitability.

S&P500 EPS Forecasts From Standard & Poor’s Dated February 10, 2017

As many are aware, Standard & Poor’s publishes earnings estimates for the S&P500.

For reference purposes, the most current estimates are reflected below, and are as of February 10, 2017:

Year 2016 estimates add to the following:

-From a “bottom up” perspective, operating earnings of $107.29/share

-From a “top down” perspective, operating earnings of N/A

-From a “bottom up” perspective, “as reported” earnings of $97.68/share

Year 2017 estimates add to the following:

-From a “bottom up” perspective, operating earnings of $130.76/share

-From a “top down” perspective, operating earnings of N/A

-From a “bottom up” perspective, “as reported” earnings of $120.47/share

Year 2018 estimates add to the following:

-From a “bottom up” perspective, operating earnings of $147.39/share

-From a “top down” perspective, operating earnings of N/A

-From a “bottom up” perspective, “as reported” earnings of $131.79/share

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RevSD, LLC offers the above commentary for informational purposes only, and does not necessarily agree with all (or any) of the views expressed by these outside parties.

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ProfitabilityIssues.com is published by RevSD, LLC (RevSD.com).  RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future business conditions, and given these conditions, offers corporations and businesses advice, strategies, and actionable methods on how to optimally increase revenues and profitability.

Businesses’ Short- And Long-Term Inflation Expectations

The Federal Reserve Bank of Atlanta publishes a monthly report titled “Business Inflation Expectations” (BIE) that contains statistics from a survey of regional businesses’ views on various factors that impact profitability.  These factors include unit costs, unit cost expectations, sales levels, profit margins, and other factors.

As described on the site:

Approximately 300 panelists receive the survey each month. Panelists represent businesses of various sizes headquartered within the Sixth District, which encompasses Alabama, Florida, Georgia, and sections of Louisiana, Mississippi, and Tennessee. Panelists range from executives of large corporations to owner-operators of small businesses. The industry composition of the panel roughly reflects the makeup of the national economy. Nevertheless, survey responses are weighted by industry shares of national gross domestic product.

An excerpt from the February 2017 BIE Survey dated February 15, 2017 (involving 213 firms responding):

Respondents indicated that, on average, they expect unit costs to rise 2.0 percent over the next 12 months. Inflation uncertainty was virtually unchanged at 2.0 percent. Firms also report that, compared to this time last year, their unit costs are up 1.7 percent. Respondents’ sales levels, compared to what they consider normal conditions, were virtually unchanged with diffusion index value of -10. Profit margins declined somewhat, with a diffusion index value of -21.

This month’s “quarterly question” concerned “Long-term inflation expectations.”  An excerpt:

Sixty-seven percent of respondents indicated that labor costs will put moderate or strong upward pressure on their prices over the next 12 months. Respondents’ expectations regarding the influence of nonlabor costs on prices increased from the last measure, with 65 percent of respondents indicating upward price pressure. Forty-two percent of respondents expect sales levels to put moderate or strong upward pressure on prices in the year ahead. The majority of firms expect productivity and margin adjustments to have little or no influence over prices in the next 12 months.

This month’s “special question” regarded “Optimism for economy and own firm’s financial prospects.”

The report also includes a variety of charts and tables depicting respondents’ answers.

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RevSD, LLC offers the above commentary for informational purposes only, and does not necessarily agree with all (or any) of the views expressed by these outside parties.

—–

ProfitabilityIssues.com is published by RevSD, LLC.  RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future business conditions, and given these conditions, offers corporations and businesses advice, strategies, and actionable methods on how to optimally increase revenues and profitability.

Two Charts Of S&P500 Net Profit Margins – January 2017

For reference purposes, below are two charts depicting net profit margins for the S&P500.  Both charts are from the FactSet Earnings Insight report (pdf) dated January 13, 2017, page 23.

The first chart depicts S&P500 net margins (TTM) since January 31, 2007, as depicted:

S&P500 trailing net margins

The second chart below shows S&P500 quarterly net margins from Q2 2014 through Q3 2016, and projected net margins from Q4 2016, as depicted:

S&P500 Quarterly Net Margins

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RevSD, LLC offers the above data and projections for informational purposes only, and does not necessarily agree with information provided by these outside parties.

—–

ProfitabilityIssues.com is published by RevSD, LLC (revsd.com).  RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future business conditions, and given these conditions, offers corporations and businesses advice, strategies, and actionable methods on how to optimally increase revenues and profitability.