I was recently a part of a great panel for MarketWatch talking about corporate earnings season so far. Sital Patel was the moderator and Joe Bell of Schaeffer’s Investment Research and Christine Short of S&P Capital IQ were the other guests. I represented See It Market, so I did my best to make us look good!
Here are some highlights – you can skip to the video below if you like.
- This is the strongest quarter of corporate earnings growth since 3Q ‘11
- Earnings are at record highs and analysts are looking for +10% growth in ’15 as well.
- Revenue is up nearly 5% as well this quarter, after years of flat to negative revenue growth
- Healthcare has nearly a 90% ‘beat rate’ which is the best out of all sectors
- Earnings growth for healthcare has been 16% versus 7% expected at the start of earnings season
- Biotech has been a huge reason healthcare is so strong. Lots of talk about biotech in a bubble, but earnings growth is justifying some of the high multiples
- Consumer discretionary has seen earnings growth of just a few percent this quarter, making it one of the weakest groups. This is interesting, as the economy continues to improve, yet consumer companies aren’t benefiting
- Financials are hands down the worst sector, as many big banks have shown negative earnings over the past year. Lower trading volumes could be one reason.
- Could we see a big sell-off in ’14? None of us expected that. I noted seasonality is bearish now and some areas of sentiment are getting a little too frothy, so near-term things are dicey. But bigger picture the bull market is alive and well.
- Last quarter was the first quarter in 10 quarters where forward guidance was raised more than lowered. This quarter is about break-even. A nice shift to see improving guidance, but also a sign expectations could be increasing as well.
You can watch the whole discussion on corporate earnings here:
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No position in any of the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
