The first-quarter earnings season has picked up pace, with results from 181 S&P 500 members or 40% of the index’s total market capitalization already out (as of April 26).
As per the latest Earnings Outlook, total earnings of these companies are up 10% on a year-over-year basis (75.7% of the companies beat EPS estimates) while total revenue is up 4.3% on a year-over-year basis (64.1% of the companies beat top-line estimates).
Notably, earnings and revenue growth numbers are significantly better than investor expectations. In fact, growth is on track to reach its highest level in almost three years. We believe that continuation of these trends through the rest of this earnings season will serve as a reassuring development for the market.
Overall first-quarter earnings for S&P 500 companies are anticipated to be up 9.7% from the year-ago quarter on revenues that are estimated to increase 5.9%. This would be better than the +7.4% growth in fourth-quarter earnings on +4.8% higher revenues. Finance, Technology, Industrial Products, and Basic Materials are expected to post double-digit earnings growth.
We note that almost 25.8% of the total market capitalization in the technology sector has reported till now. Total earnings are up 13.9% on a year-over-year basis (76.5% of the companies beat EPS estimates) while total revenue is down 0.1% on a year-over-year basis (70.6% of the companies beat top-line estimates).
Earnings for the Technology sector are anticipated to be up 11.8% on the back of 6.1% higher revenues, driven by strong growth from the semiconductor industry.
The industry is anticipated to benefit from rapidly growing cloud computing as well as Internet of Things (IoT) markets, which are driving growth for chip components to power applications particularly automotive, medical/healthcare and smart-connected devices.
Here we take a look at three semiconductor companies that are set to report their quarterly earnings on May 1:
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