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Q4 EPS Outlook

It seems a bit odd that a forward-looking industry places so much emphasis on backward looking information. But that’s what Wall Street does with quarterly earnings reports. And this is even more pronounced as Wall Street gears up to receive the news of the final quarter of 2014. In a recent report, Capital IQ consensus estimates of Q4 S&P 500 operating EPS projected 4.6% increase.

Eight of 10 sectors in the 500 were expected to show positive earnings growth in Q4, with Health Care (19.1%), Telecom Services (13.7%), and Industrials (9.7%) leading the way, while Energy (-20.6%) and Materials (-4.9%) are expected to be the only two sectors to report negative growth rates. Revenue growth in Q4 is expected to rise 2.3%, versus the 3.6% growth reported for the prior quarter. Which will be the driving forces behind the fourth quarter’s results? My report, found on www.getmarketscope.com lists the factors that likely affected EPS growth in Q4. In particular, the average price of WTI oil in Q4 ‘14 was more than 30% lower than the Q4 ’13 average, whereas the value of the U.S. dollar index averaged 10% more this quarter than in the year-ago quarter.

To access Q4 company earnings as they are released, follow us on Twitter: @SPGLearnings

Follow Sam on Twitter: @StovallSPGlobal

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