Wednesday, July 15, 2015

Another Weak Revenues Season (excerpt)

According to Standard & Poor's, S&P 500 revenues fell 2.3% y/y during Q1 mostly as a result of the plunge in the revenues of the Energy Sector, and also the strength of the dollar. On a same company basis for both periods, we calculate that S&P 500 revenues fell 3.0% y/y during Q1, but rose 2.4% excluding the Energy sector.  A similar pattern is likely for Q2. Industry analysts currently estimate a 4.0% decline in revenues during the quarter, but a small gain of 1.5% excluding Energy.

The y/y growth rate in S&P 500 revenues tends to be highly correlated with the comparable growth rate in manufacturing and trade sales. The latter was down 2.2% in May, but up 1.9% excluding petroleum.

Industry analysts are currently estimating the following revenues growth rates for Q2 on a y/y basis, from high to low: Health Care (6.1%), Telecommunication Services (2.8), Information Technology (2.6), Financials (2.5), Consumer Staples (2.4), Consumer Discretionary (2.0), Utilities (0.0), Industrials (-3.9), S&P 500 (-4.0), Materials (-8.8), and Energy (-34.8).

Today's Morning Briefing: United Shoppers of America (USA!) (1) USA women rule soccer! (2) A patriotic happening. (3) Crowd chants “USA! USA! USA!” (4) Soccer unites, politics divides. (5) The standard of living and income inequality debate. (6) Flawed income measures used to gauge inequality and poverty. (7) Key items missing. (8) What about the Earned Income Tax Credit? (9) What about government support programs? (10) Real consumer spending per household at record high. (11) Consumer stocks confirm strength of consumer. (12) Another weak earnings season for revenues, led by plunge in Energy. (13) The Greek deal is to make a deal. (14) Tsipras as Sisyphus. (15) Focus on market-weight-rated S&P 500 Retail industries. (More for subscribers.)

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