Strong Tech Sector Earnings

The picture emerging out of the Q4 earnings season is one of all around strength, with strong earnings and revenue growth and a very high proportion of companies beating estimates. Importantly, estimates for the current period have been notably going up.

Including all of this morning’s results, we now have Q4 results from 228 S&P 500 members that combined account for 54.1% of the index’s total market capitalization. Total earnings for these companies are up +15.9% from the same period last year on +9.1% higher revenues, with 82% beating EPS estimates and 79.8% beating revenue estimates.

The comparison charts below compare results from these 228 index members with what these same companies had reported in other recent periods.

For the Tech sector, we now have results from 53.4% of the sector’s market cap in the S&P 500 index. Total earnings for these Tech companies are up +28.4% from the same period last year on +8.7% higher revenues, with 90.9% beating EPS estimates and 97% beating revenue estimates.

This is better performance than we have seen from the same group of Tech companies in other recent periods. The expectation is that these trends will continue with the still to come reports from Apple (AAPL), Alphabet (NASDAQ:GOOGL) and others going forward. Apple, which reports results today, is expected to report +13.4% higher earnings on +9.8% higher revenues.

Estimates for 2018 Q1 are going up in a significant way as a result of the impact of tax law changes, as the chart below shows

For more details about the ongoing Q4 earnings season, please check out our weekly Earnings Trends report here >>>> A Very Strong Earnings Picture

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