S&P500 Earnings Trends – July 2022

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” report of July 15, 2022:

from page 27:

(click on charts to enlarge images)

S&P500 EPS trends

from page 28:

S&P500 EPS 2012-2023

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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, 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 For Years Of 2014 – 2024 As Of July 18, 2022

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

The following estimates are from Exhibit 24 of the “S&P500 Earnings Scorecard” (pdf) of July 18, 2022, and represent an aggregation of individual S&P500 component “bottom up” analyst forecasts.  For reference, the Year 2014 value is $118.78/share; the Year 2015 value is $117.46/share; the Year 2016 value is $118.10/share; the Year 2017 value is $132.00/share; the Year 2018 value is $161.93/share; the Year 2019 value is $162.93/share; the Year 2020 value is $139.72/share; and the year 2021 value is $208.12:

Year 2022 estimate:

$228.35/share

Year 2023 estimate:

$248.81/share

Year 2024 estimate:

$268.44/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, 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 July 14, 2022

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 July 14, 2022:

Year 2022 estimates add to the following:

-From a “bottom up” perspective, operating earnings of $223.17/share

-From a “bottom up” perspective, “as reported” earnings of $210.03/share

Year 2023 estimates add to the following:

-From a “bottom up” perspective, operating earnings of $246.46/share

-From a “bottom up” perspective, “as reported” earnings of $230.98/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.

—–

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

Firms’ Inflation Expectations And Concerns Regarding A Recession

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, pricing, 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 July 2022 BIE Survey dated July 13, 2022 (involving 172 firms responding):

  • Inflation expectations: Firms’ year-ahead inflation expectations remain relatively unchanged at 3.7 percent, on average.
  • Current economic environment: “Compared to normal,” sales levels and profit margins remain relatively unchanged. Year-over-year unit cost growth slightly increased at 4.4 percent, on average.
  • Quarterly question: Firms’ sales gap (percentage below “normal” unit sales levels) decreased significantly to 2.2 percent below normal. Small firms are more affected by the decrease of their unit sales levels, with 5.1 percent below “normal.”
  • Special question: Firms were asked about their current sales levels compared to pre-COVID. They were also questioned regarding their expectations about changes sales levels during the next 12 months. In addition to these questions, they were asked about recession or potential recession. A breakdown of the results can be found in the special question section below.

The report also includes other questions and 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.

Firms’ Long-Term Inflation Expectations And Effect Of Supply Disruptions

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, pricing, 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 June 2022 BIE Survey dated June 15, 2022 (involving 185 firms responding):

  • Inflation expectations: Firms’ year-ahead inflation expectations remain relatively unchanged at 3.7 percent, on average.
  • Current economic environment: “Compared to normal,” although sales levels decreased, profit margins remained relatively unchanged. Year-over-year unit cost growth slightly increased at 4.3 percent, on average.
  • Quarterly question: Firm’s long-run inflation expectations significantly increased at 3.5 percent, on average, and 87 percent of firms are expecting their unit costs to increase in the long run. Both the long-term inflation expectation (3.5 percent) and the percent of firms that expect unit costs to increase very significantly (31 percent) are at an all-time high.
  • Special question: Firms were asked whether or not they experienced supply chain disruptions or delays. They were also asked, for those who experienced supply chain disruptions or delays, how they affected the firms and how they would describe the current supply chain disruptions or delays. A breakdown of the results can be found in the special question section below.

The report also includes other questions and 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.