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SPX Earnings Update, as of 1/24/14

01/24/2014

Quarterly earnings for S&P 500-listed companies have neared the quarter pole. Next week another 130 companies will report, bringing the earnings season to the halfway mark. There is no evidence to suggest any slowdown in earnings reported to date. In fact profit margins have expanded to 9.25% (Figure 1).

 

What continues to ail global risk assets is the headwind from the emerging markets (EM). My expectation for EM assets remains consistent as it has over the past 12 months; they will continue to underperform all other global risk assets and provide the biggest challenge for further SPX appreciation. In the search for any potential EM asset trough, I expect EM equity markets will bottom first, debt markets next, and lastly, the most challenged of all EM assets, their respective currencies.

 

Q4 SPX Earnings Growth

Sector

Reported

Yet to Report

Sales Growth

EPS Growth

Overall SPX

121

377

4.18%

12.19%

Consumer Discretionary

15

69

6.65%

4.86%

Materials

5

26

6.25%

11.47%

Utilities

0

31

n/a

n/a

Technology

25

39

4.64%

10.34%

Telecom

2

4

3.73%

74.47%

Industrials

21

42

3.42%

22.64%

Consumer Staples

7

33

5.22%

3.37%

Health Care

12

42

6.77%

(-9.15%)

Financials

29

52

0.62%

16.78%

Energy

5

39

9.79%

18.16%

 

Q4 SPX Earnings Surprise

Sector

Reported

Yet to Report

Sales Surprise

EPS Surprise

Overall SPX

121

377

1.08%

6.05%

Consumer Discretionary

15

69

0.48%

1.10%

Materials

5

26

(-0.02%)

4.52%

Utilities

0

31

n/a

n/a

Technology

25

39

1.15%

4.60%

Telecom

2

4

0.23%

1.38%

Industrials

21

42

0.46%

1.38%

Consumer Staples

7

33

(-0.40%)

1.01%

Health Care

12

42

2.35%

3.95%

Financials

29

52

2.04%

12.40%

Energy

5

39

1.01%

2.35%

 

S&P 500 Index (SPX) Fundamental Metrics

 

Current Quarter

Q3 2013

Q2 2013

Q1 2013

Profit Margin

9.25

8.82

8.58

8.37

Price/Earnings

17.05

15.88

15.50

15.48

Dividend Yield

1.92%

2.09%

2.14%

2.10%

Gross Margin

31.83

31.89

32.00

32.25

Earnings

$27.80

$27.33

$26.41

$26.03

Free Cash Flow Yield

6.91%

7.50%

6.99%

6.49%

 

Date

Company Name

Symbol

Time

EPS Estimate

Monday January 27

8 Companies Report

American Electric Power

AEP US

Bef-mkt

0.565

 

Roper Industries

ROP US

Bef-mkt

1.603

 

Caterpillar

CAT US

Bef-mkt

1.275

 

Plum Creek Timber

PCL US

Aft-mkt

0.28

 

Seagate Technology

STX US

Aft-mkt

1.389

 

United States Steel

X US

Aft-mkt

-0.257

 

Apple

AAPL US

Aft-mkt

14.043

 

Zions Bancorporation

ZION US

Aft-mkt

0.407

 

Tuesday January 28

23 Companies Report

Pentair

PNR US

Bef-mkt

0.845

 

Air Products & Chemicals

APD US

Bef-mkt

1.333

 

Pfizer

PFE US

Bef-mkt

0.522

 

T Rowe Price Group

TROW US

Bef-mkt

1.032

 

DR Horton

DHI US

Bef-mkt

0.294

 

Corning

GLW US

Bef-mkt

0.272

 

EI du Pont de Nemours

DD US

Bef-mkt

0.546

 

NextEra Energy

NEE US

Bef-mkt

0.977

 

Comcast

CMCSA US

Bef-mkt

0.678

 

Danaher

DHR US

Bef-mkt

0.954

 

Harris Corp.

HRS US

Bef-mkt

1.178

 

Ford Motor

F US

Bef-mkt

0.281

 

Illinois Tool Works

ITW US

Bef-mkt

0.906

 

Total System Services

TSS US

Aft-mkt

0.475

 

Owens-Illinois

OI US

Aft-mkt

0.523

 

AT&T

T US

Aft-mkt

0.506

 

ACE

ACE US

Aft-mkt

2.016

 

Boston Properties

BXP US

Aft-mkt

1.248

 

Yahoo!

YHOO US

Aft-mkt

0.385

 

Electronic Arts

EA US

Aft-mkt

1.235

 

Amgen

AMGN US

Aft-mkt

1.685

 

Nucor

NUE US

Aft-mkt

0.404

 

Waters Corp.

WAT US

Aft-mkt

1.613

 

Wednesday January 29

26 Companies Report

Hess

HES US

Bef-mkt

1.074

 

Marathon Petroleum

MPC US

Bef-mkt

1.154

 

MeadWestvaco

MWV US

Bef-mkt

0.236

 

Valero Energy

VLO US

Bef-mkt

1.336

 

Praxair

PX US

Bef-mkt

1.548

 

Boeing

BA US

Bef-mkt

1.538

 

Rockwell Automation

ROK US

Bef-mkt

1.391

 

Dow Chemical

DOW US

Bef-mkt

0.431

 

Biogen Idec

BIIB US

Bef-mkt

2.248

 

AMETEK

AME US

Bef-mkt

0.543

 

WellPoint

WLP US

Bef-mkt

0.868

 

EMC Corp

EMC US

Bef-mkt

0.592

 

Southern Co.

SO US

Bef-mkt

0.458

 

Phillips 66

PSX US

Bef-mkt

1.09

 

QUALCOMM

QCOM US

Aft-mkt

1.185

 

Citrix Systems

CTXS US

Aft-mkt

0.977

 

Lam Research

LRCX US

Aft-mkt

1.032

 

Vertex Pharmaceuticals

VRTX US

Aft-mkt

-0.556

 

Facebook

FB US

Aft-mkt

0.269

 

Symantec

SYMC US

Aft-mkt

0.425

 

AvalonBay Communities

AVB US

Aft-mkt

1.561

 

Murphy Oil

MUR US

Aft-mkt

1.182

 

Avery Dennison

AVY US

Aft-mkt

0.681

 

Robert Half International

RHI US

Aft- mkt

0.481

 

Hudson City Bancorp

HCBK US

Aft-mkt

0.07

 

McCormick & Co

MKC US

Aft-mkt

1.19

 

Thursday January 30

52 Companies Report

Xcel Energy

XEL US

Bef-mkt

0.293

 

Airgas

ARG US

Bef-mkt

1.178

 

Northrop Grumman

NOC US

Bef-mkt

1.941

 

ConocoPhillips

COP US

Bef-mkt

1.338

 

PulteGroup

PHM US

Bef-mkt

0.451

 

Ball Corp.

BLL US

Bef-mkt

0.731

 

L-3 Communications Holdings

LLL US

Bef-mkt

1.975

 

Pitney Bowes

PBI US

Bef-mkt

0.453

 

Bemis Co.

BMS US

Bef-mkt

0.537

 

Visa

V US

Bef-mkt

2.166

 

Sherwin-Williams

SHW US

Bef-mkt

1.275

 

Alexion Pharmaceuticals

ALXN US

Bef-mkt

0.84

 

Colgate-Palmolive Co.

CL US

Bef-mkt

0.741

 

TECO Energy

TE US

Bef-mkt

0.209

 

Quest Diagnostics

DGX US

Bef-mkt

0.932

 

ADT Corp.

ADT US

Bef-mkt

0.488

 

Exxon Mobil

XOM US

Bef-mkt

1.909

 

Harley-Davidson

HOG US

Bef-mkt

0.322

 

Cardinal Health

CAH US

Bef-mkt

0.833

 

Hershey Co.

HSY US

Bef-mkt

0.859

 

Celgene

CELG US

Bef-mkt

1.55

 

Eli Lilly & Co.

LLY US

Bef-mkt

0.742

 

Time Warner Cable

TWC US

Bef-mkt

1.737

 

Whirlpool

WHR US

Bef-mkt

3.029

 

Altria Group

MO US

Bef-mkt

0.582

 

Dover Corp.

DOV US

Bef-mkt

1.274

 

Zimmer Holdings

ZMH US

Bef-mkt

1.62

 

Invesco

IVZ US

Bef-mkt

0.568

 

United Parcel Service

UPS US

Bef-mkt

1.276

 

Harman International Industries

HAR US

Bef-mkt

0.942

 

CMS Energy

CMS US

Bef-mkt

0.37

 

Franklin Resources

BEN US

Bef-mkt

0.931

 

Raytheon

RTN US

Bef-mkt

1.344

 

McKesson

MCK US

Aft-mkt

1.847

 

Chipotle Mexican Grill

CMG US

Aft-mkt

2.52

 

Computer Sciences

CSC US

Aft-mkt

0.855

 

Eastman Chemical

EMN US

Aft-mkt

1.244

 

Broadcom

BRCM US

Aft-mkt

0.575

 

CR Bard

BCR US

Aft-mkt

1.388

 

Google

GOOG US

Aft-mkt

12.325

 

Chubb Corp

CB US

Aft-mkt

2.035

 

Amazon.com

AMZN US

Aft-mkt

0.665

 

PerkinElmer

PKI US

Aft-mkt

0.701

 

3M

MMM US

Aft-mkt

1.615

 

Occidental Petroleum

OXY US

Aft-mkt

1.725

 

Viacom

VIAB US

Aft-mkt

1.158

 

Cameron International

CAM US

Aft-mkt

0.958

 

Prologis

PLD US

Aft-mkt

0.423

 

AutoNation

AN US

Aft-mkt

0.765

 

Wisconsin Energy

WEC US

Aft-mkt

0.579

 

Peabody Energy

BTU US

Aft-mkt

-0.075

 

Helmerich & Payne

HP US

Aft-mkt

1.462

 

Friday January 31

21 Companies Report

Mead Johnson Nutrition

MJN US

Bef-mkt

0.764

 

Newell Rubbermaid

NWL US

Bef-mkt

0.46

 

Aon PLC

AON US

Bef-mkt

1.503

 

AbbVie

ABBV US

Bef-mkt

0.823

 

Tyco International

TYC US

Bef-mkt

0.45

 

MasterCard

MA US

Bef-mkt

0.597

 

Weyerhaeuser

WY US

Bef-mkt

0.285

 

National Oilwell Varco

NOV US

Bef-mkt

1.39

 

PACCAR

PCAR US

Bef-mkt

0.927

 

Simon Property Group

SPG US

Bef-mkt

2.431

 

Mattel

MAT US

Bef-mkt

1.2

 

CONSOL Energy

CNX US

Bef-mkt

0.08

 

Legg Mason

LM US

Bef-mkt

0.764

 

Beam

BEAM US

Bef-mkt

0.721

 

LyondellBasell Industries NV

LYB US

Bef-mkt

1.407

 

Chevron

CVX US

Bef-mkt

2.582

 

Consolidated Edison

ED US

Bef-mkt

0.653

 

Thermo Fisher Scientific

TMO US

Bef-mkt

1.376

 

Dominion Resources

D US

Bef-mkt

0.883

 

Wynn Resorts Ltd

WYNN US

Bef-mkt

1.746

 

Tyson Foods Inc

TSN US

Bef-mkt

0.651

 

 

Figure 1: S&P 500 Index (SPX) Profit Margin, Prior 8 Quarters


Source: Bloomberg

Virtus Investment Partners provides this communication as a matter of general information. The opinions stated herein are those of the author and not necessarily the opinions of Virtus, its affiliates or its subadvisers. Portfolio managers at Virtus make investment decisions in accordance with specific client guidelines and restrictions. As a result, client accounts may differ in strategy and composition from the information presented herein. Any facts and statistics quoted are from sources believed to be reliable, but they may be incomplete or condensed and we do not guarantee their accuracy. This communication is not an offer or solicitation to purchase or sell any security, and it is not a research report. Individuals should consult with a qualified financial professional before making any investment decisions.