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S&P 500 Revenue Thoughts And Some Interesting Tidbits For Readers

Brian Gilmartin, CFA profile picture
Brian Gilmartin, CFA

The weekly earnings commentary will be out tomorrow, i.e. Saturday, August 4th, 2018. However, today, I thought readers would be interested in looking at some "S&P 500 Revenue" stats.

1.) Despite being the sector showing the fastest EPS and revenue growth year-over-year (y/y), Energy is showing the lowest beat rate for revenue at just 59%. The only sector worse is Telco at 50%. Chevron (CVX) had a big revenue miss for the second quarter of 2018, while Exxon (XOM) had a big revenue beat, and Exxon's market cap is larger than Chevron's by about $100 billion. The lesson for readers is that high expectations are everything in investing. The positive revisions and the high y/y growth rates in Energy resulted in lofty anticipation heading into Q2 '18 reporting season for the Energy sector.

2.) Consumer Discretionary is the only sector to see lower expected revenue growth at August 3rd for Q2 '18 reporting season versus July 1 '18. The remaining sectors all show stronger expected revenue growth for Q2 '18 at August 3rd versus July 1 growth rates.

3.) Note the Telco sector - note how many companies are in the sector and you know why Standard & Poor's is creating the "Communications" sector in September '18. It's like the horse-and-buggy sector.

4.) Note how the Financial sector has the strongest "upside surprise" factor of the 11 sectors.

Interesting Tweet from Schwab's Liz Ann Sonders:

CNBC does - for the most part - a nice job covering the capital markets, but it's no exaggeration to say it beat the "Apple (AAPL) $1 trillion market cap" to death like it beat the "Dow 10,000" to death in the early 2000s.

Clients own only a quarter, maybe less, of the iPhone giant than they did in Q1 '18. Apple's unit growth was just 1% y/y in iPhones

This article was written by

Brian Gilmartin, CFA profile picture
Brian Gilmartin, is a portfolio manager at Trinity Asset Management, a firm he founded in May, 1995, catering to individual investors and institutions that werent getting the attention and service deserved, from larger firms. Brian started in the business as a fixed-income / credit analyst, with a Chicago broker-dealer, and then worked at Stein Roe & Farnham in Chicago, from 1992 - 1995, before striking out on his own and managing equity and balanced accounts for clients. Brian has a BSBA (Finance) from Xavier University, Cincinnati, Ohio, (1982) and an MBA (Finance) from Loyola University, Chicago, January, 1985. The CFA was awarded in 1994. Brian has been fortunate enough to write for the TheStreet.com from 2000 to 2012, and then the WallStreet AllStars from August 2011, to Spring, 2012. Brian also wrote for Minyanville.com, and has been quoted in numerous publications including the Wall Street Journal.

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