While results from a few companies are still awaited, but for all practical purposes the Q1 earnings season is now in the rearview mirror. For the 488 S&P 500 members that have reported results already, as of May 26th, total earnings for the quarter are up +2.1% on -3.4%% lower revenues, with 65.3% beating EPS estimates and only 44.5% coming ahead of revenue estimates. This is weak performance relative to what we have been seeing in other recent quarters, the top-line performance is particularly very weak.

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There were a number of moving parts below the aggregate numbers, with extremely weak results from Energy sector dragging the growth numbers down and strong results from the Finance sector working in the opposite direction. For the Energy sector, total Q1 earnings were down -54.2% from the same period last year on -34.7% lower revenues, though pre-season expectations were for even bigger year-over-year declines. Excluding both the Finance and Energy sectors, total earnings for the S&P 500 index would be up +7.9% from the same period last year on +1.9% higher revenues. This ex-Oil and ex-Finance performance would still be weaker relative to other recent reporting cycles.

Estimates for the current period have been coming down, though the magnitude of negative revisions isn't as severe was the case for Q1. Total earnings for the S&P 500 index are expected to be down -6.7% from the same period last year in Q2, which is down from the +1.1% growth rate that was expected in early January.

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