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Spotlight on Tech Earnings

Sheraz Mian

Total earnings for the 205 S&P 500 members that have reported Q3 results through Monday, October 28 are down -0.2% from the same period last year on +4.1% higher revenues, with 78% beating EPS estimates and 62% beating revenue estimates.

This is weaker earnings growth relative to what we had seen from the same group of 205 index members in other recent periods, but revenue growth is about in-line with other recent periods, as the comparison charts below show.

For the Technology sector, we now have Q3 results from 29.9% of the sector companies in the S&P 500 index. Total earnings for these Tech sector companies are down -6.2% from the same period last year on -0.2% lower revenues, with 85% beating EPS estimates and 65% beating revenue estimates.

For the quarter as a whole, combining the results that have come out with estimates for the still-to-come companies, total Tech sector companies expected to be down -8.5% on +1.2% higher revenues.

Driving the sector’s weak growth picture is the drag from the chip industry whose Q3 earnings are expected to be down more than -30% from the same period last year. In addition to the semiconductors, a number of major companies, including Apple (AAPL) and Alphabet (GOOGL) that are on deck to report this week, are expected to have lower earnings compared to the year-earlier level.

For a comprehensive review of the Q3 earnings season and expectations for the coming quarters, please check out our weekly Earnings Trends report >>>>> A Better-Than-Expected Earnings Picture

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