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Looking Ahead to the Q1 Earnings Season

Sheraz Mian

For most folks, earnings season means the 4 to 6 week period at the end of each calendar quarter when announcements of quarterly earnings releases dominate market headlines. For folks like us, however, who have to monitor and record each and every earnings release, the definition and duration of each earnings season isn’t that simple. Take for example, the 161 companies coming out with quarterly results this week, including 4 S&P 500 members.

Since we are still a couple of weeks away from the end of the March quarter, most folks would assume that all of these reports represent the tail of the 2016 Q4 earnings season. But that’s not correct; not all of this week’s earnings releases fall in the Q4 bucket. In fact, a number of this week’s earnings releases form part of the Q1 earnings season. For example, the Oracle (ORCL) report after the market’s close on Wednesday is for that company’s fiscal quarter that ended in February, which will form part of our Q1 earnings tally. The Adobe (ADBE) report after the close on Thursday similarly becomes part of the Q1 bucket.

That said, most of this week’s 161 earnings releases do represent the tail of the Q4 reporting cycle. The chart below of weekly reporting calendar for the S&P 500 index clearly shows that we still have another four weeks to go before the Q1 earnings season really takes off.

Expectations for Q1

Total Q1 earnings are expected to be up +6.6% from the same period last year on +6.5% higher revenues. This would follow +7.4% earnings growth in 2016 Q4 on +3.7% revenue growth, the highest growth pace in all most two years.

Estimates for Q1 came down as the quarter unfolded, with the current +6.6% growth down from +10.4% at the end of December. The chart below shows how Q1 earnings growth expectations have evolved over the last three months.

Please note that while Q1 estimates have followed well traversed path that we have been seeing consistently over the last few years, the magnitude of negative revisions compares favorably to other periods. In other words, Q1 estimates have come down, but they haven’t come down by as much.

The table below shows the summary picture for Q1, contrasted with what was actually achieved in Q4 (please note that we have officially closed the books on Q4 yet, as 4 index members still have to report quarterly results).

Recap of the Q4 Earnings Season

We now have Q4 results from 495 S&P 500 members, or 99% of the index’s total membership. Total earnings for these 495 index members are up +7.5% on +4.8% higher revenues, with 68.5% beating EPS estimates and 54.5% coming ahead of top-line expectations. For the quarter as a whole (combining estimates for the still-to-come 4 index members with what has come out already), total Q4 earnings are on track to be up +7.4% from the same period last year on +3.7% higher revenues.

Any way you look at it, the Q4 earnings season turned out to be a good one. Not only has growth turned out to be the highest in two years, but total earnings for the quarter also reached a new quarterly record. Please recall that earnings growth turned positive only in 2016 Q3, having declined in each of the preceding 5 quarters, as the chart below of year-over-year earnings growth for the S&P 500 index shows.

Importantly, the positive Q4 growth wasn’t a result of easy comparisons, but actually a function of strong gains in earnings. In fact, the overall tally of Q4 earnings for the S&P 500 index is on track to reach an all-time record for the index, surpassing the previous record achieved in 2014 Q4. The chart below shows the quarterly earnings totals for index, contrasting the highlighted Q4 tally with actual results from the last 8 quarters and expected tallies in the coming 4 quarters.

As you can see, this record isn’t expected to last very long, with growth expected to ramp up notably in the coming quarters.

The chart below shows the Q3 earnings growth contrasted with declines in the preceding 5 quarters. As you can see in the chart below, the growth pace is expected to ramp up in 2017.

The market is reflecting this improved earnings backdrop as the chart below of the S&P 500 relative to forward 12-month Zacks Consensus estimates shows.

Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, click here>>>

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Here is a list of the 161 companies including 4 S&P 500 members reporting this week.

Company Ticker Current Qtr Year-Ago Qtr Last EPS Surprise % Report Day Time
TURNING PT BRND TPB 0.31 N/A -12.82% Monday BTO
KOPIN CORP KOPN -0.11 -0.11 14.29% Monday BTO
ADAPTIMMUNE THR ADAP -0.29 -0.13 11.11% Monday BTO
TOWNSQAR MEDIA TSQ 0.25 0.09 0.00% Monday BTO
HUTCHISN CH-ADR HCM -0.06 N/A N/A Monday BTO
NOBILIS HEALTH HLTH 0.36 0.27 -112.50% Monday BTO
LEJU HOLDINGS LEJU -0.23 0.11 -16.67% Monday BTO
SUPERCOM LTD SPCB N/A 0.03 -500.00% Monday BTO
DEL TACO RSTRNT TACO 0.2 N/A 8.33% Monday BTO
GENER8 MARITIME GNRT 0.18 0.59 -125.00% Monday BTO
MINERVA NEUROSC NERV -0.25 -0.34 -4.35% Monday BTO
KMG CHEMICALS KMG 0.42 0.4 6.67% Monday AMC
INTER PARFUMS IPAR 0.12 0.06 6.12% Monday AMC
ARATANA THERAP PETX -0.43 -0.37 20.83% Monday AMC
TILLYS INC TLYS 0.21 0.1 120.00% Monday AMC
TABULA RASA HLT TRHC 0.11 N/A 33.33% Monday AMC
EXTRACTION O&G XOG -0.16 N/A N/A Monday AMC
PEREGRINE PHARM PPHM -0.03 -0.08 33.33% Monday AMC
RESEARCH FRNTRS REFR -0.01 -0.08 50.00% Monday AMC
REAL INDUSTRY RELY -0.37 -0.15 -185.71% Monday AMC
TRIPLEPOINT VEN TPVG N/A 0.36 14.29% Monday AMC
CRAFT BREW ALLN BREW 0.09 0.07 -81.25% Monday AMC
COHERUS BIOSC CHRS -1.63 -1.35 205.70% Monday AMC
COUPA SOFTWARE COUP -0.21 N/A -59.09% Monday AMC
ENZO BIOCHEM ENZ -0.04 -0.07 40.00% Monday AMC
RESOURCE CAPITL RSO 0.02 0.03 -22.58% Monday AMC
BELLICUM PHARM BLCM -0.69 -0.63 -6.45% Monday AMC
INVESTORS RL ES IRET 0.13 0.13 0.00% Monday AMC
LIMONEIRA CO LMNR -0.18 -0.29 0.00% Monday AMC
AMPHASTAR PHARM AMPH N/A 0.16 0.00% Monday AMC
GOLDEN ENTMNT GDEN 0.12 0.03 -60.00% Monday AMC
RYERSON HOLDING RYI -0.09 -0.46 -20.00% Monday AMC
READING INTL RDI 0.08 0.14 1500.00% Monday N/A
NEOS THERAPTCS NEOS -1.42 -0.57 0.00% Tuesday BTO
DSW INC CL-A DSW 0.16 0.14 4.08% Tuesday BTO
COBALT INTL EGY CIE -0.13 -0.17 -20.00% Tuesday BTO
HD SUPPLY HLDGS HDS 0.44 0.27 1.22% Tuesday BTO
CUI GLOBAL INC CUI -0.07 -0.04 66.67% Tuesday BTO
ENERNOC INC ENOC -1.13 -1.1 400.00% Tuesday BTO
RADNET INC RDNT 0.11 0.07 -63.64% Tuesday BTO
ALLIED MOTN TEC AMOT 0.19 0.07 -15.63% Tuesday BTO
AURIS MEDICAL EARS -0.28 -0.16 17.86% Tuesday BTO
TRANSMONTN PTNR TLP N/A 0.6 18.37% Tuesday BTO
VERITIV CORP VRTV 0.74 0.88 -72.36% Tuesday BTO
ADV EMISSIONS ADES 0.57 -0.13 N/A Tuesday BTO
ALBIREO PHARMA ALBO -0.88 -1.5 N/A Tuesday BTO
AMPCO-PITTSBRGH AP -0.34 -0.27 N/A Tuesday BTO
BIO-PATH HLDGS BPTH -0.03 -0.02 0.00% Tuesday BTO
NEXPOINT REIT NXRT 0.36 0.34 -3.03% Tuesday BTO
PATRIOT NATIONL PN 0.12 0.12 -73.91% Tuesday BTO
TRINITY BIOTECH TRIB -2.58 0.08 16.67% Tuesday BTO
WALTER INV MGMT WAC -0.53 -0.32 -185.71% Tuesday BTO
YY INC-ADR YY 1.05 0.96 26.76% Tuesday BTO
CLEARSIDE BIO CLSD -0.34 N/A 37.78% Tuesday BTO
CELLDEX THERAPT CLDX -0.34 -0.33 9.38% Tuesday AMC
CHEMOCENTRYX CCXI 0.07 -0.26 -414.29% Tuesday AMC
ACHOGEN INC AKAO -0.47 -0.61 25.45% Tuesday AMC
FOGO DE CHAO FOGO 0.27 0.29 6.67% Tuesday AMC
ARENA PHARMA ARNA -0.09 -0.13 28.57% Tuesday AMC
CONNECTURE INC CNXR 0.22 0.19 -50.00% Tuesday AMC
INFINITY PHARMA INFI -0.56 -0.8 53.57% Tuesday AMC
PTC THERAPEUTIC PTCT -0.99 -1.5 14.88% Tuesday AMC
RESOLUTE ENERGY REN 0.8 -0.75 -367.86% Tuesday AMC
RUBICON PROJECT RUBI N/A 0.54 575.00% Tuesday AMC
TRITON INTL LTD TRTN 0.26 0.51 -100.00% Tuesday AMC
EVERI HOLDINGS EVRI -0.2 0.08 5.88% Tuesday AMC
KEANE GROUP INC FRAC -0.32 N/A N/A Tuesday AMC
ROSETTA STONE RST N/A -0.26 62.50% Tuesday AMC
SIENTRA INC SIEN -0.52 -0.78 0.00% Tuesday AMC
HOSTESS BRANDS TWNK 0.13 N/A N/A Tuesday AMC
NEOPHOTONICS CP NPTN 0.03 0.11 -200.00% Tuesday AMC
KURA ONCOLOGY KURA -0.39 -0.42 9.76% Tuesday AMC
FTD COS INC FTD N/A 0.4 550.00% Tuesday AMC
CHINA LODGING HTHT 0.23 0.17 10.71% Tuesday AMC
RWE AG -SP ADR RWEOY N/A N/A N/A Tuesday N/A
PRUDENTIAL PLC PUK N/A N/A N/A Tuesday N/A
TITAN INTL INC TWI -0.08 -0.38 -38.46% Wednesday BTO
VOYAGER THERAPT VYGR -0.43 -0.67 14.63% Wednesday BTO
ACLARIS THERAPT ACRS -0.59 -0.28 26.47% Wednesday BTO
AIMMUNE THERAPT AIMT -0.46 -0.39 -20.45% Wednesday BTO
ABRAXAS PETE/NV AXAS -0.01 -0.02 50.00% Wednesday BTO
SITEONE LANDSCP SITE N/A N/A -14.29% Wednesday BTO
HARVEST CAP CRD HCAP 0.4 0.54 38.24% Wednesday BTO
NEONODE INC NEON -0.01 -0.06 -400.00% Wednesday BTO
OFS CAPITAL CRP OFS 0.35 0.46 -8.11% Wednesday BTO
BAVARIAN NORDIC BVNRY 0.17 0 N/A Wednesday BTO
BELLATRIX EXPLR BXE -0.05 -0.03 16.67% Wednesday BTO
CHRISTOPHER&BNK CBK -0.45 -0.24 80.00% Wednesday BTO
CONCORDIA INTL CXRX N/A 1.08 -132.04% Wednesday BTO
GTX INC GTXI -0.57 -0.6 0.00% Wednesday BTO
PENN WEST EGY PWE N/A -1.73 -27.27% Wednesday BTO
E.ON AG-ADR EONGY N/A N/A N/A Wednesday BTO
ORACLE CORP ORCL 0.57 0.59 0.00% Wednesday AMC
PAPA MURPHYS HL FRSH 0.01 0.12 -160.00% Wednesday AMC
INOVIO PHARMAC INO -0.29 -0.25 -7.69% Wednesday AMC
LATAM AIRLINES LFL 0.11 0.05 -60.00% Wednesday AMC
PRIMO WATER CP PRMW -0.33 0.02 0.00% Wednesday AMC
TROVAGENE INC TROV -0.29 -0.27 -6.25% Wednesday AMC
WILLIAMS-SONOMA WSM 1.52 1.55 2.60% Wednesday AMC
RING ENERGY INC REI 0.02 -0.05 100.00% Wednesday AMC
ALARM.COM HLDGS ALRM 0.12 0.13 60.00% Wednesday AMC
ATHENE HOLDING ATH 1.16 N/A N/A Wednesday AMC
CATALYST PHARMA CPRX -0.07 -0.07 16.67% Wednesday AMC
EVOKE PHARMA EVOK -0.16 -0.37 11.11% Wednesday AMC
GUESS INC GES 0.42 0.57 -21.43% Wednesday AMC
AVID TECH INC AVID 0.15 0.09 0.00% Wednesday AMC
CORINDUS VASCLR CVRS -0.08 -0.06 -16.67% Wednesday AMC
CONTANGO OIL&GS MCF -0.23 -2.19 -161.90% Wednesday AMC
AETERNA ZENTARS AEZS -0.85 -1.46 17.57% Wednesday AMC
AROTECH CORP ARTX 0.02 0.05 700.00% Wednesday AMC
MAGICJACK VOCTC CALL 0.15 0.29 109.09% Wednesday AMC
CAPRICOR THERAP CAPR -0.24 -0.21 -7.41% Wednesday AMC
GRIDSUM HOLDING GSUM 0 N/A -288.89% Wednesday AMC
HERITAGE INSUR HRTG -0.22 0.66 -13.95% Wednesday AMC
JABIL CIRCUIT JBL 0.36 0.46 18.97% Wednesday AMC
KLONDEX MINES KLDX N/A 0.05 33.33% Wednesday AMC
PFENEX INC PFNX -0.68 -0.37 343.33% Wednesday AMC
PENN VA CP PVAC 0.3 N/A N/A Wednesday AMC
SHARPSPRING INC SHSP -0.12 -0.54 -25.00% Wednesday AMC
SYNACOR INC SYNC -0.1 -0.01 N/A Wednesday AMC
YIRENDAI LTD YRD -0.03 0.25 750.00% Wednesday AMC
CONATUS PHARMA CNAT -0.32 -0.3 6.06% Wednesday AMC
PRIMERO MINING PPP N/A 0 -500.00% Wednesday N/A
DOLLAR GENERAL DG 1.41 1.3 -3.26% Thursday BTO
CELSION CORP CLSN -0.19 -0.24 -21.05% Thursday BTO
B2GOLD CORP BTG 0.03 0 25.00% Thursday BTO
HISTOGENICS CP HSGX -0.47 -0.63 17.74% Thursday BTO
MEDLEY MGMT INC MDLY 0.16 0.14 -12.50% Thursday BTO
PROTALIX BIOTHR PLX -0.11 N/A 30.00% Thursday BTO
PATHEON NV PTHN 0.2 N/A 17.14% Thursday BTO
US PHYSICAL THR USPH 0.47 0.48 -6.12% Thursday BTO
HEIDELBERGCEMNT HDELY N/A N/A 30.00% Thursday BTO
JA SOLAR HOLDGS JASO -0.07 0.5 400.00% Thursday BTO
LIGHTINTHEBOX-A LITB 0.01 0.11 0.00% Thursday BTO
XBIOTECH INC XBIT -0.42 -0.37 17.39% Thursday BTO
KARYOPHARM THER KPTI -0.65 -0.81 13.75% Thursday BTO
INSYS THERAP INSY -0.05 0.22 20.00% Thursday BTO
OSISKO GOLD LTD OR 0.06 0.09 33.33% Thursday BTO
LUFTHANSA -ADR DLAKY N/A N/A N/A Thursday BTO
RENTECH INC RTK N/A -0.48 -121.05% Thursday BTO
ADOBE SYSTEMS ADBE 0.72 0.52 15.28% Thursday AMC
CALERES INC CAL 0.4 0.26 -1.22% Thursday AMC
SMART SAND INC SND 0.5 N/A -100.00% Thursday AMC
BIOAMBER INC BIOA -0.19 -0.4 -18.18% Thursday AMC
FATE THERAPEUTC FATE -0.29 -0.26 3.57% Thursday AMC
CATABASIS PHARM CATB -0.49 -0.63 16.92% Thursday AMC
VIVINT SOLAR VSLR -0.42 -0.5 21.74% Thursday AMC
EXONE CO/THE XONE -0.04 -0.08 -27.78% Thursday AMC
EXA CORP EXA -0.04 -0.1 125.00% Thursday AMC
AQUAVENTURE HLD WAAS -0.19 N/A N/A Thursday AMC
WESTMORELAND CO WLB 1.15 -1.06 -239.39% Thursday AMC
BIOTIME INC BTX -0.18 -0.16 60.00% Thursday AMC
CUMULUS MEDIA CMLS -0.61 -0.48 -737.50% Thursday AMC
FUTUREFUEL CORP FF N/A 0.68 20.83% Thursday AMC
GSV CAPITAL CP GSVC N/A -0.24 N/A Thursday AMC
LUNA INNOVATION LUNA 0 -0.02 -100.00% Thursday AMC
TPI COMPOSITES TPIC -0.09 N/A 200.00% Thursday AMC
TIFFANY & CO TIF 1.37 1.46 13.43% Friday BTO
BIODELIVERY SCI BDSI -0.27 0.2 -15.38% Friday BTO
VUZIX CORP VUZI -0.15 -0.24 -60.00% Friday BTO
TSAKOS EGY NAVG TNP 0.06 0.41 -100.00% Friday BTO


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