Q1 earnings are not so bad but Full Year 2016 growth estimates very poor everywhere
The Q1 earnings season is coming to an end. 89% of companies have reported in the US, 94% in Europe and 95% in Japan.
- In the US, 74% of S&P500 companies beat EPS estimates by 4%. The actual EPS growth is running at -8% yoy and -2% ex-Energy. The proportion of US companies beating sales estimates, at 53%, is up from the previous quarters. Top-line growth prints at -3% yoy and +1% ex-Energy.
- In Europe, 56% of Stoxx600 companies beat EPS estimates by 3%. The actual Q1 EPS growth is coming out at -19% yoy and -15% ex-Energy. Only 42% of the companies beat sales estimates – the lowest in two years (probably because of the Euro rebound during Q1). Top line growth is coming weak too, at -4% yoy.
- Specifically for Eurozone, 54% of EuroStoxx companies beat earnings estimates. EPS growth is coming out at -12% yoy and -9% ex-Energy. Revenue delivery is weak with only 41% of companies beating estimates. Sales are down 8% yoy and down 6% ex-Energy.
- In Japan, only 38% of Topix companies beat EPS estimates, the lowest in more than four years, delivering growth of -23% yoy. 44% of the companies beat revenue estimates and top line is down by 1% yoy. The poor Japanese results are probably largely due to the strong currency too.
2016 and 2017 estimated EPS Growth expectations
(source IBES -JPMorgan)