Q2 Earnings Summary from Zacks

Dirk Van Dijk breaks it down:

Almost done with earnings season, with 433 or 86.6% of S&P 500 second quarter results in. Total earnings growth low at 11.2%, but mostly due to one stock (BAC). Ex-Financials, growth is 20.9% year over year. Total revenue growth 12.15%, 12.73% ex-Financials. Median earnings surprise 3.13% and median sales surprise 2.06%. Remaining firms (67) expected to grow 8.9%, 5.4% growth expected excluding Financials.

If remaining firms all report in line, then 87.9% of earnings are now in. Final growth to be 10.95%, 18.80% ex-Financials. At start of earnings season 9.65% growth expected, 12.18% ex-Financials.

Earnings beats top misses by a 3.42 ratio, sales beats top misses by 2.81 ratio, 69.5% of all firms report positive earnings surprise, 72.1% beat on revenues.

Full-year total earnings for the S&P 500 jumps 45.6% in 2010, expected to rise 16.0% further in 2011. Growth to continue in 2012 with total net income expected to rise 11.5%. Financials major earnings driver in 2010. Excluding Financials, growth was 27.7% in 2010, and expected to be 18.8% in 2011 and 10.8% in 2012.

Total revenues for the S&P 500 rose 7.78% in 2010, expected to be up 6.72% in 2011, and 6.54% in 2012. Excluding Financials, revenues up 9.16% in 2010, expected to rise 11.14% in 2011 and 5.96% in 2012.

Annual Net Margins marching higher, from 5.88% in 2008 to 6.40% in 2009 to 8.65% for 2010, 9.34% expected for 2011 and 9.83% in 2012. Margin Expansion major source of earnings growth. Net margins ex-Financials 7.79% in 2008, 7.07% in 2009, 8.27% for 2010, 8.84% expected in 2011, and 9.25% in 2012.

Revisions ratio for full S&P 500 at 1.61 for 2011, at 1.41 for 2012, both bullish readings. Up from last week and driven by new increases, not old estimates falling out. Ratio of firms with rising-to-falling mean estimates at 1.44 for 2011, 1.30 for 2012 — bullish readings. Total revisions activity still climbing, but should peak soon.

The S&P 500 earned $546.5 billion in 2009, rising to $795.4 billion in 2010, expected to climb to $922.2 billion in 2011. In 2012, the 500 are collectively expected to earn $1.028 trillion.

S&P 500 earned $57.20 in 2009: $83.16 in 2010 and $96.47 in 2011 expected, bottom up. For 2012, $107.53 expected. Puts P/Es at 14.4x for 2010 and 12.4x for 2011 and 11.2x for 2012, very attractive relative to 10-year T-note rate of 2.56%. Top-down estimates: $96.26 for 2011 and $105.44 for 2012.

Posted by on August 9th, 2011 at 1:26 pm


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