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Earnings Season Stats by Sector

Last week we did a post looking at the percentage of all companies that have beaten earnings estimates this reporting period.  Below we break up the numbers by sectors to see which areas of the market are coming in better or worse than average.  As of last Friday, 74% of all US companies had beaten earnings estimates.  Four sectors have "beat rates" that are better than 74%, while six have "beat rates" that are worse than 74%.  As shown below, the Technology sector has far and away the highest beat rate at 84.4% this earnings season.  Energy ranks second at 77.8%, followed by Industrials (76.9%) and Health Care (74.3%).  The Consumer Staples sector surprisingly has the lowest beat rate at just 50%.  Materials ranks 2nd to last at 65%, and Consumer Discretionary is just above that at 66%.  Telecom (66.7%), Utilities (66.7%), and Financials (71.4%) are the other sectors with beat rates less than the overall market.

We also track how stocks react to their earnings reports on the first trading day following their release.  For stocks that report after the close, we use the next day's change, and for stocks that report in the morning, we use that day's change.  So far this earnings season, the average one-day change in reaction to earnings for all stocks has been +0.07%.  Interestingly, stocks in just two sectors (Technology and Industrials) are averaging one-day gains better than the overall average.  Stocks in the Technology sector are averaging a one-day change of +1.84% in response to their earnings reports.  This is unsurprising given that 84% of stocks have beaten estimates in the sector.  The Industrial sector's 2nd place rank in terms of report-day performance is unsurpring as well since it has the 3rd highest beat rate.  Interestingly, even though the Consumer Staples sector has the lowest beat rate, the stocks have averaged a one-day change of +0.03%, which ranks 3rd out of 10.  Telecom, Utilities, and Energy have performed the worst on earnings report days.  Consumer Discretionary, Health Care, Financials, and Materials are all averaging one-day declines on their report days as well.

For a complete analysis of earnings season along with the best and worst individual reports, subscribe to Bespoke Premium today.

A couple articles came out over the weekend highlighting our earnings season stats: Barron's The Trader column by Kopin Tan and Jeff Saut's weekly Raymond James column.

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