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We begin to see Q4 earnings season begin to accelerate with Starbucks (SBUX), American Express (AXP), E*TRADE (ETFC) and Schlumberger (SLB) reporting Thursday after the bell. By this time next week, we will be in the midst of earnings reports being released at full-throttle.
Starbucks beat earnings estimates but missed on sales. Comps over the holidays went up 9 percent year over year. Click here for more.
Similarly, American Express missed top-line expectations but registered a beat on the bottom line. The company gave fiscal 2016 guidance of $5.40-5.70 per share, corresponding with its planned sale of its Costco co-brand portfolio. Click here for more.
E*TRADE not only beat earnings estimates by a penny, but also outperformed on quarterly revenues. The company’s CEO remarked that, “…E*TRADE is in a better position than it has ever been.” Click here for more.
Oilfield services giant Schlumberger also brought in mixed numbers — beating on earnings but missing on sales. The company also announced it will buy back $10 billion in stock and set its dividend yield at $50 per share. Click here for more.
Q4 Earnings Scorecard
Including all of today’s earnings releases, we now have Q4 results from 67 S&P 500 members that combined account for 17.5% of the index’s total market capitalization. Total earnings for these companies are up +2.4% from the same period last year on +2.6% higher revenues, with 68.7% beating EPS estimates and 40.3% coming ahead of revenue estimates.
Comparing the results thus far with what we have seen from the same group of companies in other recent quarters provides a mixed picture, with the earnings growth rate below other recent periods while revenue growth comparing favorably. With respect to surprises, earnings beat ratios are about in-line with recent history while revenue beat ratios are below other recent periods.
Looking at Q4 as a whole, combining the actual results from the 67 companies that have reported with estimates for the still-to-come 433 index members, total earnings are expected to be down -6.7% on -4.5% lower revenues — the third quarter in a row of earnings declines for the index. Estimates for 2016 Q1 have started to come down lately, with total earnings for the S&P 500 index now expected to be down -3.6% from the same period last year, which is down from roughly flat growth for the period a few weeks back. In fact, estimates for the first half of the year have effectively evaporated in recent weeks.
To learn more about what’s transpired thus far for Q4 earnings season, please check out Sheraz Mian’s latest Earnings Trends article.
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