JPM Summarizes Earnings Season So Far: “At -8%, The S&P500 Q1 EPS Growth Is The Worst Since ’09”

As we approach the mid point of earnings season (this is the busiest week of the Q1 earnings season with 39% of companies having already reported in the US, 33% in Europe and 17% in Japan), here is a quick summary of where we stand.

Here is a quick rundown courtesy of JPM:

In the US, 80% of S&P500 companies beat EPS estimates, surprising positively by 3%. The actual EPS is running at -8% yoy for the overall market and at -7% ex-Energy. The S&P500 blended Q1 EPS is tracking at $26.5, down from $29.1 at the start of the year. The proportion of US companies beating sales estimates, at 58%, is up from previous quarters but top-line growth remains soft, at -1% yoy.

In Europe, 57% of Stoxx600 companies beat EPS estimates, surprising positively by 4%. The actual Q1 EPS growth is coming out at -18% yoy, but it is flat ex-Energy and Financials. Only 43% of the companies beat sales expectations, down from previous quarters. Top-line growth is weak, too, at -7%. Ex-Energy and Financials, sales are running at -4% yoy.

In Eurozone, 59% of the companies that have reported beat estimates. Overall EPS growth is coming out at -6% yoy, and at +2% ex-Energy. So far, the Euro area is the only region delivering positive earnings growth ex-Energy. Revenue delivery is weaker with only 44% of companies beating sales estimate. Sales are down 5% yoy and 2% ex-Energy.

In Japan, the earnings season is at an earlier stage. So far, only 40% of companies beat EPS estimates, recording yoy growth of -11%. 40% of the companies beat revenue estimates with negative top-line growth of -2% yoy.

80% of US companies beating EPS estimates is above the historical average. However, we note that in the last 10 years, the proportion of EPS beats was always well above the 50% threshold, suggesting that companies typically do a good job at managing analysts’ expectations. The actual delivered EPS growth is a better indicator of the underlying earnings backdrop, in our view. At -8%, the S&P500 Q1 EPS growth is the worst since ’09.

Finally, this is what global earnings “growth” looks like.