Sector Performance This Earnings Season

by Bespoke Investment Group

Through last Friday, 896 companies had reported their quarterly numbers this earnings season.  Of those 896 companies, 68.4% had reported better earnings per share numbers than analysts expected.  Below we take a look at the earnings beat rates by sector.  Technology and Telecom currently have the highest earnings beat rates at 75.3% and 75%, respectively.  Health Care ranks third at 73.6%, followed by Consumer Discretionary and Materials.  All five of these sectors have beat rates that are higher than the overall reading.

On the weaker side, the Utilities sector has the lowest beat rate at 40.9%, followed by Energy at 59.3% and Consumer Staples at 59.3%.  Financials and Industrials are the two other sectors with beat rates that are lower than the overall reading. 

Aside from a couple sectors, high versus low earnings beat rates have coincided with strong versus weak price performance.  Below we highlight the average 1-day change for companies on their report days by sector.  While the average one-day change for all stocks on their report days this earnings season has been 0.79%, Health Care, Technology, Consumer Discretionary, and Materials stocks are all averaging one-day gains of more than 1%.  All four of these sectors are outperforming in terms of the earnings beat rate.  The Consumer Staples sector is the only one that is underperforming in terms of beat rate and outperforming in terms of price performance.

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