Key Points:
Another Strong Earnings Season
The second quarter earnings season is shaping up to be a very strong one. We define the second quarter as any fiscal period ending in May, June or July, so there are a total of 333 (66.6%) of the S&P 500 firms that have already reported. The median surprise so far is 6.12% and there have been 250 positive surprises and only 54 disappointments (surprise ratio of 4.63) as far as EPS is concerned. As for growth, the total net income of those 333 firms is 44.4% higher than it was a year ago. For those firms, that represents acceleration from the 40.9% growth they posted in the first quarter.
As far as the top line is concerned, the story is also upbeat. Positive surprises led disappointments by 200 to 109, or a surprise ratio of 1.83 and a median surprise of 1.17%. Total revenue is 11.1% higher, down from the 12.0% growth those same firms saw in the first quarter.
However, there seems to be an asymmetrical response in the market. Firms are not being rewarded if they post a positive surprise, but are punished severely if they disappoint, particularly if they disappoint on the top line.
However, the firms that have yet to report appear to be very different than those that have already reported, and are expected to show much slower growth, especially when it comes to earnings. The 167 S&P 500 firms that have not yet reported are expected to only show growth of 9.85% for earnings, and revenue growth of 9.77%.
In other words, the firms that have already reported have shown huge net margin expansion, but the ones that have not reported yet are expected to show no margin expansion at all, at least not in aggregate. While some sectors have a much higher percentage of their reports in, that sort of difference seems highly unlikely to me. My bet is that their earnings come in higher than expected as well, and have at least some net margin expansion. Even if that does not happen, it looks like we will probably see total net income grow by over 30% when all is said and done for the quarter.
Outlook to Next Quarter & Beyond
Looking ahead to the third quarter, the comparisons continue to get tougher, and growth is expected to drop to 7.1% among those that have not reported yet, and to 22.0% for those that have already reported, or about 15% in total. For an economic recovery that seems to be very sluggish and lethargic, this is still very impressive. With 9.5% unemployment and very sluggish growth in median real wages, there are lots of reasons for the average American to complain. But for the business community to complain, they show themselves to be nothing but a bunch of spoiled crybabies.
For the full year, earnings are expected to grow 39.8% in 2010, with further growth of 16.4% in 2011. Next year we should once again set a new all-time record high for S&P 500 earnings. That will be long before employment returns to record levels. Productivity growth over the last year has been at its highest level in 50 years, and ALL of the benefits of that productivity are flowing to capital rather than labor.
Keep in mind that these results refer to the S&P 500, which are almost by definition big businesses, many of which get a majority of their earnings from overseas. Small businesses have not been faring as well, and have had a hard time getting access to capital.
An effort to aid small businesses through a package of loans and tax cuts was recently blocked by a filibuster in the Senate, even though many of the Senators that voted to prevent a final vote on the bill were co-sponsors of the legislation. Since small businesses are the principal driver of job creation, one can only conclude that those U.S. senators want to keep unemployment as high as possible, at least through November.
It is important to note that when we say “2009” in this report, we mean the last full fiscal year to be reported, even if that year happens to end in June 2010. June is one of the largest non-December fiscal year-end months. Thus, as those firms “switch over” not only the projections for 2010 can change, but so too can the “historical 2009” results.
Regardless of some of the technical timing issues, it means that earnings will have fully recovered by mid-2011, and that full-year 2011 earnings will be 8.2% above full-year 2007 earnings (before the Great Recession started). That is years before we are likely to see a full recovery in the job market. Collectively, the 500 firms in the S&P 500 earned $547.4 billion in “2009,” and that is going to grow to $765.2 billion this year and $890.7 billion in 2011. Translated into “EPS” for the index, earnings are expected to rise from $57.98 in 2009 to $81.00 in 2010 and $94.15 in 2011.
In other words, then, the S&P 500 is selling for 19.0x 2009 earnings, but just 13.6x 2010 and 11.7x 2011 earnings. By historical standards, that is quite cheap. Normally, when interest rates and inflation are low, P/E ratios are higher than average. Well, we currently have some of the lowest rates of inflation in decades, and interest rates are at near-record lows. It only costs the government 2.92% to borrow for 10 years.
It is not hard to find good, solid blue chip companies that are providing dividend yields of more than that, and not just a bunch of electric utilities either. Based on this year’s earnings, the earnings yield is 7.35% and based on next year it is 8.55%.
Pricing in Uncertainty
There is still substantial uncertainty about the strength of the economy. The inventory rebuild cycle is just about over, and the effects of the stimulus are wearing off. State and local governments are facing massive budget shortfalls, and will be forced to lay off many municipal workers like teachers and policemen and women. This has kept investor sentiment very muted, but provides a big wall of worry for the market to climb.
The time to buy is when others are despondently selling, and the time to sell is when others are greedily buying. This is particularly true when the actual fundamentals are solid and when the market is simply depressed.
There is nothing more fundamental than earnings (OK, perhaps the balance sheets, but those look better than they have in decades as well, with about $1.8 trillion in cash sitting on them) and earnings look pretty good, or at least the expectations for them do. Over the next few weeks we will see if those expectations are rational or not.
Revisions Ratios
The key to the bear case based on the earnings data is that the revisions ratios dropped very sharply during the period between earnings seasons. But now that the pace of revisions activity is picking up in response to earnings, so are the revisions ratios, but so far not to anything comparable to what we saw in the first quarter earnings season.
The revisions ratios now stand at 1.51 for 2010 and 1.05 for 2011. There is a “mechanical” reason for the 2010 estimates to increase in response to a second-quarter positive earnings surprise. If the full-year estimates do not at least reflect the amount of the surprise, implicitly the analysts are cutting their estimates for the third and fourth quarters.
There is no such “mechanical” effect for 2011 estimates. If we do not soon see a big increase in the revisions ratios as the pace of estimate revisions activity picks up, it would be “the dog that didn’t bark.” This extremely strong earnings season in terms of surprises should be leading to a very high revisions ratio -- especially for the present fiscal year, but normally that has been true for the following year as well.
In mid-May, at the heart of the first quarter earnings season, the revisions ratios stood at 2.62 for 2010, and at 2.49 for 2011. The first quarter earnings season as very similar to this one in terms of earnings surprises. In other words, for the S&P 500 as a whole we were seeing about five estimate increases for every estimate cut. By the time earnings season got underway, those ratios had fallen to 0.73 for 2010 and 0.71 for 2011, or about four estimate cuts for every three estimate increases.
Thus there has been a nice pick-up in the number of upward estimate revisions, but not like what one would expect given the number and size of the estimate surprises. Thus the dog is barking, but it is more like the yip of a toy poodle than the snarl of a pit bull. For 2011, which does not benefit from the mechanical effect, the dog has been pretty silent.
Scorecard & Earnings Surprise
Historically, a “normal earnings season” will have a surprise ratio of about 3:1 and a median surprise of about 3.0%. Thus, this is a very positive earnings season. This is a big enough sample that it would be highly unusual for things to turn around and have the remaining firms turn around and on-balance disappoint.
Sales Surprises
Reported Quarterly Growth: Total Net Income
The first table shows the actual reported growth of those that have already reported, and the second table showing the expected growth for the firms that have yet to report.
Expected Quarterly Growth: Total Net Income
Quarterly Growth: Total Revenues Reported
The first table shows the growth actually reported, and the second table shows the expectations for the majority of firms that have yet to report.
Quarterly Growth: Total Revenues Expected
The table shows the growth expected for the second and third quarters for those firms that have not yet reported.
Annual Total Net Income Growth
Annual Total Revenue Growth
Revisions: Earnings
The Zacks Revisions Ratio: 2010
Revisions: Earnings
The Zacks Revisions Ratio: 2011
Total Income and Share
P/E Ratios
Biggest FY1 Revisions
The table below shows the S&P 500 firms with the biggest increases in their FY1 (mostly 2010) mean estimate over the last 4 weeks. To qualify, the current mean estimate has to be greater than $0.50 and there must be more than 3 estimates for FY1. In addition to the change in the mean estimate, the net percentage of estimates being raised is shown for both FY1 and FY2, as well as the P/E ratios based on each year’s earnings is shown.
Note that estimate momentum and value are not mutually exclusive, and that two of the firms with the biggest positive estimate momentum have single-digit P/Es based on FY1 earnings. The most interesting of these firms will be where the net revisions percentage (#up-#dn/Tot) is more than 0.50 but less than 1.00.
Big mean estimate changes based on a handful of individual revisions are suspect, but could prove to be the most interesting if other analysts follow suit. On the other hand if all the analysts have raised their estimates already, the mean estimate is less likely to rise again over the next month.
Data in this report, unless stated otherwise, is through the close on Thursday 7/29/2010.
We use the convention of referring to the next full fiscal year to be completed as 2010, not all firms are on December fiscal years, this can cause discontinuities in the data, particularly around this time of year. The data is based on FY1, not based on 2010, even though I may call it 2010 in the report. All numbers, including historical ones, reflect the current composition of the S&P 500, thus some historical numbers may differ from those reported by S&P which are based on the composition of the index at the time of the reports.
- Second quarter earnings season shaping up as a very strong one. So far 66.6% of firms reporting (333). Surprise ratio 4.63 with a 6.12% median surprise. Total net income grows 44.4%.
- Sales Surprise ratio at 1.83, median surprise 1.17%; 60% of all firms do better than expected on top line. Total revenue growth 11.09%.
- Total net income for the firms yet to report is expected to be 9.85% above second quarter of 2009 levels. Significant slowdown from the 63.3% growth those same firms had in the first quarter. A further slowdown to 7.0% growth expected in the third quarter.
- Total revenue growth for those yet to report expected to be 9.8%, down from the 13.6% the same firms reported in the first quarter. Still a very healthy level of revenue growth. Revenue growth expected to fall to 4.2% in the third quarter.
- Total earnings for the S&P 500 expected to jump 39.8% in 2010, 16.4% further in 2011.
- Autos, Finance, Basic Materials and Energy expected to be earnings growth leaders in 2010. Construction expected to move from the red to the black. No sector expected to see earnings decline in 2010.
- Total revenues for the S&P 500 expected to rise 4.2% in 2010, 6.5% in 2011.
- Given 12.1% (history) revenue growth in first quarter, and 10.6% and 6.1% expectations for second quarter and third quarters (weighted average of reported and yet to report), implies a slowdown in the fourth quarter (or increases in full-year estimates).
- Huge net margin expansion expected to continue in 2010 and 2011.
- Revisions ratio for full S&P 500 at 1.51 for 2010, at 1.04 for 2011, substantial improvement from last week. Ratio of firms with rising to falling mean estimates at 1.05 for 2010, 0.80 for 2011.
- S&P 500 firms earned a total of $547.4 billion in 2009, expected to earn $765.2 billion in 2010, $890.7 billion in 2011.
- S&P 500 earned $57.98 in 2009, $81.00 in 2010 and $94.15 in 2011 expected, bottom up. Puts P/Es at 18.0x for 2009, 13.6x for 2010, and 11.7x for 2011.
- Top-Down estimates: $79.38 for 2010, $90.92 for 2011.
Another Strong Earnings Season
The second quarter earnings season is shaping up to be a very strong one. We define the second quarter as any fiscal period ending in May, June or July, so there are a total of 333 (66.6%) of the S&P 500 firms that have already reported. The median surprise so far is 6.12% and there have been 250 positive surprises and only 54 disappointments (surprise ratio of 4.63) as far as EPS is concerned. As for growth, the total net income of those 333 firms is 44.4% higher than it was a year ago. For those firms, that represents acceleration from the 40.9% growth they posted in the first quarter.
As far as the top line is concerned, the story is also upbeat. Positive surprises led disappointments by 200 to 109, or a surprise ratio of 1.83 and a median surprise of 1.17%. Total revenue is 11.1% higher, down from the 12.0% growth those same firms saw in the first quarter.
However, there seems to be an asymmetrical response in the market. Firms are not being rewarded if they post a positive surprise, but are punished severely if they disappoint, particularly if they disappoint on the top line.
However, the firms that have yet to report appear to be very different than those that have already reported, and are expected to show much slower growth, especially when it comes to earnings. The 167 S&P 500 firms that have not yet reported are expected to only show growth of 9.85% for earnings, and revenue growth of 9.77%.
In other words, the firms that have already reported have shown huge net margin expansion, but the ones that have not reported yet are expected to show no margin expansion at all, at least not in aggregate. While some sectors have a much higher percentage of their reports in, that sort of difference seems highly unlikely to me. My bet is that their earnings come in higher than expected as well, and have at least some net margin expansion. Even if that does not happen, it looks like we will probably see total net income grow by over 30% when all is said and done for the quarter.
Outlook to Next Quarter & Beyond
Looking ahead to the third quarter, the comparisons continue to get tougher, and growth is expected to drop to 7.1% among those that have not reported yet, and to 22.0% for those that have already reported, or about 15% in total. For an economic recovery that seems to be very sluggish and lethargic, this is still very impressive. With 9.5% unemployment and very sluggish growth in median real wages, there are lots of reasons for the average American to complain. But for the business community to complain, they show themselves to be nothing but a bunch of spoiled crybabies.
For the full year, earnings are expected to grow 39.8% in 2010, with further growth of 16.4% in 2011. Next year we should once again set a new all-time record high for S&P 500 earnings. That will be long before employment returns to record levels. Productivity growth over the last year has been at its highest level in 50 years, and ALL of the benefits of that productivity are flowing to capital rather than labor.
Keep in mind that these results refer to the S&P 500, which are almost by definition big businesses, many of which get a majority of their earnings from overseas. Small businesses have not been faring as well, and have had a hard time getting access to capital.
An effort to aid small businesses through a package of loans and tax cuts was recently blocked by a filibuster in the Senate, even though many of the Senators that voted to prevent a final vote on the bill were co-sponsors of the legislation. Since small businesses are the principal driver of job creation, one can only conclude that those U.S. senators want to keep unemployment as high as possible, at least through November.
It is important to note that when we say “2009” in this report, we mean the last full fiscal year to be reported, even if that year happens to end in June 2010. June is one of the largest non-December fiscal year-end months. Thus, as those firms “switch over” not only the projections for 2010 can change, but so too can the “historical 2009” results.
Regardless of some of the technical timing issues, it means that earnings will have fully recovered by mid-2011, and that full-year 2011 earnings will be 8.2% above full-year 2007 earnings (before the Great Recession started). That is years before we are likely to see a full recovery in the job market. Collectively, the 500 firms in the S&P 500 earned $547.4 billion in “2009,” and that is going to grow to $765.2 billion this year and $890.7 billion in 2011. Translated into “EPS” for the index, earnings are expected to rise from $57.98 in 2009 to $81.00 in 2010 and $94.15 in 2011.
In other words, then, the S&P 500 is selling for 19.0x 2009 earnings, but just 13.6x 2010 and 11.7x 2011 earnings. By historical standards, that is quite cheap. Normally, when interest rates and inflation are low, P/E ratios are higher than average. Well, we currently have some of the lowest rates of inflation in decades, and interest rates are at near-record lows. It only costs the government 2.92% to borrow for 10 years.
It is not hard to find good, solid blue chip companies that are providing dividend yields of more than that, and not just a bunch of electric utilities either. Based on this year’s earnings, the earnings yield is 7.35% and based on next year it is 8.55%.
Pricing in Uncertainty
There is still substantial uncertainty about the strength of the economy. The inventory rebuild cycle is just about over, and the effects of the stimulus are wearing off. State and local governments are facing massive budget shortfalls, and will be forced to lay off many municipal workers like teachers and policemen and women. This has kept investor sentiment very muted, but provides a big wall of worry for the market to climb.
The time to buy is when others are despondently selling, and the time to sell is when others are greedily buying. This is particularly true when the actual fundamentals are solid and when the market is simply depressed.
There is nothing more fundamental than earnings (OK, perhaps the balance sheets, but those look better than they have in decades as well, with about $1.8 trillion in cash sitting on them) and earnings look pretty good, or at least the expectations for them do. Over the next few weeks we will see if those expectations are rational or not.
Revisions Ratios
The key to the bear case based on the earnings data is that the revisions ratios dropped very sharply during the period between earnings seasons. But now that the pace of revisions activity is picking up in response to earnings, so are the revisions ratios, but so far not to anything comparable to what we saw in the first quarter earnings season.
The revisions ratios now stand at 1.51 for 2010 and 1.05 for 2011. There is a “mechanical” reason for the 2010 estimates to increase in response to a second-quarter positive earnings surprise. If the full-year estimates do not at least reflect the amount of the surprise, implicitly the analysts are cutting their estimates for the third and fourth quarters.
There is no such “mechanical” effect for 2011 estimates. If we do not soon see a big increase in the revisions ratios as the pace of estimate revisions activity picks up, it would be “the dog that didn’t bark.” This extremely strong earnings season in terms of surprises should be leading to a very high revisions ratio -- especially for the present fiscal year, but normally that has been true for the following year as well.
In mid-May, at the heart of the first quarter earnings season, the revisions ratios stood at 2.62 for 2010, and at 2.49 for 2011. The first quarter earnings season as very similar to this one in terms of earnings surprises. In other words, for the S&P 500 as a whole we were seeing about five estimate increases for every estimate cut. By the time earnings season got underway, those ratios had fallen to 0.73 for 2010 and 0.71 for 2011, or about four estimate cuts for every three estimate increases.
Thus there has been a nice pick-up in the number of upward estimate revisions, but not like what one would expect given the number and size of the estimate surprises. Thus the dog is barking, but it is more like the yip of a toy poodle than the snarl of a pit bull. For 2011, which does not benefit from the mechanical effect, the dog has been pretty silent.
Scorecard & Earnings Surprise
- With two thirds of reports in, it looks like we are having a very strong earnings season. A total of 333 or 66.6% of firms have reported. The surprise ratio is 4.63 with a 6.12% median surprise. Total net income is 44.39% higher than last year.
- Autos, Transports, Conglomerates and Business Service have yet to record a disappointment this season. No sector has more disappointments than positive surprises.
- 75.0% of all firms posted positive surprises, 76.9% posted higher EPS than last year.
Historically, a “normal earnings season” will have a surprise ratio of about 3:1 and a median surprise of about 3.0%. Thus, this is a very positive earnings season. This is a big enough sample that it would be highly unusual for things to turn around and have the remaining firms turn around and on-balance disappoint.
| Income Surprises | Yr/Yr Growth | % Reported | Surprise Median | EPS Surp Pos | EPS Surp Neg | # Grow Pos | # Grow Neg |
| Auto | 808.63% | 100.00% | 37.73 | 5 | 1 | 6 | 0 |
| Construction | 74.85% | 63.64% | 24.29 | 7 | 0 | 5 | 2 |
| Consumer Discretionary | 17.82% | 55.88% | 12.26 | 15 | 2 | 14 | 5 |
| Transportation | 74.09% | 88.89% | 9.70 | 7 | 0 | 8 | 0 |
| Computer and Tech | 63.69% | 63.89% | 8.94 | 31 | 8 | 41 | 5 |
| Conglomerates | 8.33% | 88.89% | 8.82 | 8 | 0 | 7 | 1 |
| Finance | 67.78% | 75.32% | 8.25 | 43 | 11 | 40 | 17 |
| Consumer Staples | 10.11% | 59.46% | 6.13 | 18 | 2 | 18 | 4 |
| Industrial Products | 62.79% | 75.00% | 6.06 | 13 | 2 | 11 | 4 |
| Oils and Energy | 98.33% | 62.50% | 5.56 | 19 | 6 | 17 | 8 |
| Aerospace | -1.73% | 100.00% | 5.32 | 8 | 2 | 5 | 5 |
| Basic Materials | 100.49% | 82.61% | 4.92 | 13 | 4 | 18 | 1 |
| Utilities | 1.50% | 34.88% | 3.57 | 10 | 5 | 8 | 6 |
| Business Service | 17.79% | 84.21% | 3.28 | 12 | 0 | 13 | 3 |
| Medical | 12.25% | 76.60% | 3.11 | 29 | 4 | 29 | 7 |
| Retail/Wholesale | 9.69% | 50.00% | 1.11 | 12 | 7 | 16 | 6 |
| S&P | 44.39% | 66.60% | 6.12 | 250 | 54 | 256 | 74 |
Sales Surprises
- Sales Surprise ratio at 1.83, median surprise 1.17%, 60.0% of all firms do better than expected on top line.
- More firms report growing than shrinking revenues, ratio 3.53:1; 77.5% of all firms report higher revenues than a year ago.
- Revenue growth healthy at 11.09%, but still greatly lags earnings growth pointing to net margin expansion.
- Autos and Transports have perfect records of no sales disappointments so far.
- Utilities, Staples and Aerospace have more disappointers than positive revenue surprises.
| Sales Surprises | Yr/Yr Growth | % Reported | Surprise Median | Sales Surp Pos | Sales Surp Neg | # Grow Pos | # Grow Neg |
| Auto | 26.09% | 100.00% | 6.33 | 6 | 0 | 6 | 0 |
| Conglomerates | 2.01% | 88.89% | 2.90 | 7 | 1 | 6 | 2 |
| Computer and Tech | 24.42% | 63.89% | 2.24 | 33 | 13 | 42 | 4 |
| Transportation | 18.82% | 88.89% | 2.10 | 8 | 0 | 8 | 0 |
| Consumer Discretionary | 7.22% | 55.88% | 1.89 | 11 | 8 | 15 | 4 |
| Business Service | 8.28% | 84.21% | 1.75 | 13 | 3 | 12 | 2 |
| Basic Materials | 26.68% | 82.61% | 1.53 | 12 | 7 | 18 | 1 |
| Industrial Products | 21.98% | 75.00% | 1.40 | 10 | 6 | 14 | 2 |
| Finance | -0.82% | 75.32% | 1.21 | 24 | 10 | 36 | 22 |
| Medical | 9.45% | 76.60% | 1.09 | 23 | 13 | 29 | 7 |
| Construction | 1.30% | 63.64% | 1.00 | 4 | 3 | 3 | 4 |
| Oils and Energy | 27.10% | 62.50% | 0.69 | 14 | 11 | 21 | 4 |
| Retail/Wholesale | 4.74% | 50.00% | 0.33 | 15 | 7 | 18 | 4 |
| Utilities | 0.54% | 34.88% | -0.29 | 7 | 8 | 10 | 5 |
| Consumer Staples | 7.84% | 59.46% | -0.33 | 10 | 12 | 13 | 9 |
| Aerospace | -2.25% | 100.00% | -1.00 | 3 | 7 | 7 | 3 |
| S&P | 11.09% | 66.60% | 1.17 | 200 | 109 | 258 | 73 |
Reported Quarterly Growth: Total Net Income
The first table shows the actual reported growth of those that have already reported, and the second table showing the expected growth for the firms that have yet to report.
- The total net income of firms that have reported so far is 44.4% above what they reported in the second quarter of 2009. These same firms reported year-over-year growth of 40.1% in the first quarter. Sequential earnings growth is 10.5%.
- Eight sectors are posting growth of more than 50% so far. Only Aerospace has a lower net income this year than last.
- Reporting firms expected to show growth slowing to 22.0% in the third quarter year over year (tougher comp). Earnings expected to drop 6.2% sequentially.
- The numbers in the table (and Revenue Growth table) below only refer to those firms which have already reported. Refer back to the % reporting in the scorecard to assess the significance of the sector growth numbers.
| Income Growth | Sequential Q3/Q2 E | Sequential Q2/Q1 A | Year over Year 2Q 10 A | Year over Year 3Q 10 E | Year over Year 1Q 09 A |
| Auto | -41.30% | 34.54% | 808.63% | 37.84% | 230.82% |
| Basic Materials | -19.52% | -3.10% | 100.49% | 35.45% | 181.48% |
| Oils and Energy | -9.08% | 17.85% | 98.33% | 40.29% | 63.94% |
| Construction | -16.82% | 96.07% | 74.85% | 26.57% | 23.48% |
| Transportation | -1.60% | 45.55% | 74.09% | 54.60% | 45.26% |
| Finance | -17.48% | 3.26% | 67.78% | 28.13% | 40.61% |
| Computer and Tech | -1.14% | 16.58% | 63.69% | 39.32% | 79.86% |
| Industrial Products | -0.25% | 56.84% | 62.79% | 27.84% | 63.10% |
| Consumer Discretionary | 25.21% | 5.59% | 17.82% | 2.83% | 39.07% |
| Business Service | 3.95% | 5.52% | 17.79% | 20.27% | 12.04% |
| Medical | -4.44% | 0.82% | 12.25% | 1.76% | 13.45% |
| Consumer Staples | 0.14% | 22.00% | 10.11% | 5.92% | 19.89% |
| Retail/Wholesale | 5.45% | -11.84% | 9.69% | 5.08% | 17.81% |
| Conglomerates | -8.26% | 33.51% | 8.33% | 0.13% | 0.62% |
| Utilities | 8.76% | -7.37% | 1.50% | 1.21% | -2.93% |
| Aerospace | -3.35% | 18.77% | -1.73% | 143.15% | -5.84% |
| S&P | -6.23% | 10.51% | 44.39% | 22.04% | 40.95% |
Expected Quarterly Growth: Total Net Income
- Total net income for the majority that have yet to report is expected to be 9.85% above second quarter of 2009 levels, 11.7% below first quarter 2010 levels.
- Significant slowdown from the 63.3% growth those same firms had in the first quarter. A further slowdown to 7.0% growth expected in the third quarter. Comparisons get tougher as we move forward.
- Materials and Construction expected to post triple-digit gains. Finance, Discretionary and Staples expected to post negative growth for remaining firms.
- Three sectors now expected to earn less than they did a year ago, nine sectors to see double-digit gains (including moving from negative to positive).
| Income Growth | Sequential Q3/Q2 E | Sequential Q2/Q1 E | Year over Year 2Q 10 E | Year over Year 3Q 10 E | Year over Year 1Q 10 A |
| Basic Materials | -17.91% | 9.72% | 158.60% | 9.91% | 158.31% |
| Construction | -21.24% | 993.44% | 141.19% | 125.55% | 97.94% |
| Oils and Energy | 6.59% | -11.44% | 56.24% | 32.73% | 75.40% |
| Transportation | 1.55% | 34.71% | 52.18% | 43.88% | 3.39% |
| Retail/Wholesale | -12.28% | -18.18% | 32.99% | -5.54% | 20.12% |
| Computer and Tech | 8.56% | 0.33% | 30.79% | 48.93% | 26.21% |
| Industrial Products | -10.08% | 47.93% | 27.75% | 7.23% | 22.13% |
| Business Service | 9.87% | -2.50% | 16.57% | 0.17% | 21.12% |
| Medical | 2.22% | -8.72% | 14.52% | 16.01% | 19.42% |
| Utilities | 42.00% | -12.35% | 8.13% | 5.08% | 8.18% |
| Consumer Staples | 15.32% | -17.28% | -5.08% | 1.93% | 41.12% |
| Consumer Discretionary | 19.48% | -13.74% | -13.23% | 2.69% | 28.33% |
| Finance | 5.36% | -20.82% | -20.16% | -13.47% | 759.35% |
| Auto | Na | Na | Na | Na | Na |
| Conglomerates | Na | Na | Na | Na | Na |
| Aerospace | Na | Na | Na | Na | Na |
| S&P | 6.80% | -11.73% | 9.85% | 7.03% | 63.33% |
Quarterly Growth: Total Revenues Reported
The first table shows the growth actually reported, and the second table shows the expectations for the majority of firms that have yet to report.
- S&P 500 reported Revenues up 11.09% year over year in 2Q, down from over 11.95% revenue increase the same firms showed in the 1Q. This is a very healthy level of revenue growth.
- Six sectors seeing double digit revenue growth so far, with five over 20%. Energy and Materials lead with gains tied to commodity price increases.
- Only Financials and Aerospace show negative revenue growth.
| Sales Growth | Sequential Q3/Q2 E | Sequential Q2/Q1 A | Year over Year 2Q 10 A | Year over Year 3Q 10 E | Year over Year 1Q 09 A |
| Oils and Energy | 3.42% | 5.77% | 27.10% | 16.75% | 35.40% |
| Basic Materials | -4.17% | 4.13% | 26.68% | 14.83% | 20.90% |
| Auto | -8.69% | 9.95% | 26.09% | -1.90% | 24.20% |
| Computer and Tech | 12.77% | 9.21% | 24.42% | 20.25% | 20.65% |
| Industrial Products | 1.67% | 17.90% | 21.98% | 21.35% | 3.73% |
| Transportation | 3.98% | 7.89% | 18.82% | 15.22% | 9.93% |
| Medical | 3.17% | 1.07% | 9.45% | 8.42% | 11.55% |
| Business Service | 5.69% | 3.27% | 8.28% | 6.29% | 5.76% |
| Consumer Staples | -7.69% | 14.11% | 7.84% | -7.83% | 9.88% |
| Consumer Discretionary | 8.58% | 4.53% | 7.22% | 5.37% | 7.88% |
| Retail/Wholesale | 8.91% | -2.39% | 4.74% | 4.48% | 6.18% |
| Conglomerates | 6.68% | 6.22% | 2.01% | 3.25% | -0.12% |
| Construction | -3.97% | 11.30% | 1.30% | 1.08% | -8.62% |
| Utilities | 2.65% | -5.43% | 0.54% | 1.24% | -0.87% |
| Finance | -6.69% | -5.95% | -0.82% | -7.48% | 5.35% |
| Aerospace | 9.76% | 3.79% | -2.25% | 3.03% | -2.14% |
| S&P | -0.95% | 2.87% | 11.09% | 6.15% | 11.95% |
Quarterly Growth: Total Revenues Expected
The table shows the growth expected for the second and third quarters for those firms that have not yet reported.
- Total revenue growth for those yet to report expected to be 9.8%, down from the 13.6% the same firms reported in the first quarter. Still a very healthy level of revenue growth.
- Revenue growth expected to decelerate to 4.2% in the third quarter.
- Double-digit revenue growth expected for eight sectors, led by Transports and Conglomerates, with just a handful of firms left to report. Energy leads among sectors with a significant number of firms left to report.
| Sales Growth | Sequential Q3/Q2 E | Sequential Q2/Q1 E | Year over Year 2Q 10 E | Year over Year 3Q 10 E | Year over Year 1Q 10 A |
| Transportation | 2.17% | 0.00% | 34.19% | 45.03% | 31.54% |
| Conglomerates | Na | 0.00% | 31.69% | Na | 49.60% |
| Oils and Energy | 3.91% | 0.00% | 28.07% | 29.13% | 36.44% |
| Utilities | -2.51% | -0.05% | 23.52% | 0.00% | 5.61% |
| Computer and Tech | 4.66% | -1.56% | 16.14% | 13.24% | 18.11% |
| Finance | 1.45% | 0.88% | 13.66% | -33.12% | 40.07% |
| Medical | 1.69% | -0.31% | 10.19% | 14.09% | 12.27% |
| Industrial Products | -6.92% | -1.79% | 10.04% | 10.79% | 5.23% |
| Consumer Staples | -1.66% | -0.89% | 5.58% | 11.47% | 11.31% |
| Retail/Wholesale | -2.41% | 2.31% | 4.30% | 4.32% | 6.14% |
| Consumer Discretionary | 6.19% | -3.52% | 2.90% | 10.36% | 4.54% |
| Business Service | 3.56% | 2.48% | 2.85% | 7.11% | 2.35% |
| Construction | 2.14% | 0.00% | 2.27% | 14.37% | 16.92% |
| Basic Materials | -5.64% | 0.00% | 0.80% | 10.19% | 18.01% |
| Auto | Na | Na | Na | Na | Na |
| Aerospace | Na | Na | Na | Na | Na |
| S&P | 0.87% | 0.29% | 9.77% | 4.22% | 13.61% |
Annual Total Net Income Growth
- Total S&P 500 Net Income in 2009 was 1.53% above 2008 levels, following a 34.22% plunge in 2008. We follow the convention where we are calling the last full fiscal year to be reported “2009” and the next full year to be reported “2010.” Thus, when some off fiscal year firms finish their fiscal years and report, it can “change history,” which appears to be the case this week.
- Total earnings for the S&P 500 expected to jump 39.8% in 2010, 16.4% further in 2011.
- Earnings recovery to happen by mid-2011, full year 2011 earnings to be 7.0% above 2007 levels. In other words, the recovery in earnings will occur far before the recovery in jobs, as we are unlikely to return to 2007 job levels until late 2013 at the earliest.
- Autos, Finance, Basic Materials and Tech expected to be earnings growth leaders in 2010. Construction expected to move from the red to the black. No sector expected to see earnings decline in 2010.
- Despite strong growth in both 2010 and 2011, Energy earnings in 2011 expected to be 23.8% below 2008 levels.
| EPS Growth | 2008 | 2009 | 2010 | 2011 |
| Construction | + to - | - to - | - to + | 38.04% |
| Auto | + to - | - to + | 1767.64% | 21.64% |
| Finance | + to - | - to + | 292.37% | 29.23% |
| Basic Materials | -4.43% | -50.17% | 56.87% | 27.21% |
| Computer and Tech | 15.29% | -4.20% | 46.79% | 12.63% |
| Oils and Energy | 20.87% | -56.55% | 43.75% | 22.03% |
| Transportation | 1.20% | -30.04% | 33.96% | 23.06% |
| Industrial Products | 5.39% | -36.71% | 22.62% | 23.11% |
| Aerospace | 13.20% | -14.87% | 15.60% | 11.31% |
| Consumer Discretionary | 8.56% | -10.95% | 15.47% | 15.01% |
| Retail/Wholesale | 1.43% | 2.62% | 12.98% | 13.01% |
| Consumer Staples | -11.64% | 6.33% | 12.91% | 10.74% |
| Business Service | 24.80% | 1.07% | 12.51% | 16.33% |
| Medical | 9.32% | 1.87% | 6.34% | 8.59% |
| Utilities | -1.15% | -13.62% | 2.85% | 7.22% |
| Conglomerates | -10.96% | -23.88% | -1.21% | 8.18% |
| S&P | -34.22% | 1.53% | 39.80% | 16.40% |
Annual Total Revenue Growth
- Total S&P 500 revenue in 2009 6.74% below 2008 levels.
- Total revenues for the S&P 500 expected to rise 4.21% in 2010, 6.52% in 2011.
- Given 12.1% (history) revenue growth in first quarter, and 10.6% and 5.5% expectations for second quarter and third quarters (weighted average of reported and yet to report) implies slowdown in the fourth quarter (or increases in full-year estimates).
- However, quarterly revenue estimates are thinner (fewer estimates in the consensus) than annual ones.
- Energy to lead 2010 revenue race, Tech and Transports to take silver and bronze, but Materials and Industrials have a chance to make it on to the medal stand.
- Looking out to 2011, Energy is the only sector expected to see double-digit revenue growth, although five other sectors expected to have revenue growth over 8%.
| Sales Growth | 2009 | 2010 | 2011 |
| Oils and Energy | -34.47% | 20.73% | 15.25% |
| Computer and Tech | -6.22% | 16.50% | 8.68% |
| Transportation | -13.65% | 13.07% | 8.19% |
| Basic Materials | -19.30% | 12.54% | 7.60% |
| Industrial Products | -19.55% | 12.45% | 9.35% |
| Medical | 6.16% | 9.27% | 3.23% |
| Business Service | -2.35% | 5.77% | 6.09% |
| Consumer Discretionary | -8.72% | 5.09% | 5.61% |
| Retail/Wholesale | 1.25% | 4.85% | 5.34% |
| Utilities | -5.87% | 4.53% | 2.51% |
| Auto | -21.36% | 2.87% | 9.84% |
| Conglomerates | -13.19% | 1.31% | 1.75% |
| Aerospace | 6.30% | 0.77% | 5.92% |
| Construction | -15.92% | 0.38% | 9.28% |
| Consumer Staples | -1.59% | -2.85% | 4.21% |
| Finance | 21.18% | -20.54% | 2.83% |
| S&P | -6.74% | 4.21% | 6.52% |
Revisions: Earnings
The Zacks Revisions Ratio: 2010
- Revisions ratio for full S&P 500 at 1.51, up from 1.08 last week, now in positive territory.
- Tech leads among large sectors. Transports, Autos and Conglomerates strong, but have small sample sizes.
- Twelve sectors seeing more increases than cuts
- Ratio of firms with rising to falling mean estimates at 1.05 up from 0.92 last week, a neutral reading still.
- Total number of revisions (4-week total) up to 3,714 from 2,745 (35.3%).
- Increases up to 2,235 from 1,426 (56.7%), cuts up to 1,479 from 1,319 (12.1%).
- Total Revisions activity close to seasonal peak.
- Increase in revision ratio very muted given positive surprises. Is this the dog that didn’t bark?
| Sector | %Ch Curr Fiscal Yr Est - 4 wks | # Firms Up | # Firms Down | # Ests Up | # Ests Down | Revisions Ratio | Firms up/down |
| Transportation | 5.27 | 9 | 0 | 128 | 10 | 12.80 | 999.99 |
| Auto | 10.11 | 4 | 2 | 45 | 8 | 5.63 | 2.00 |
| Conglomerates | 0.74 | 5 | 3 | 55 | 10 | 5.50 | 1.67 |
| Computer and Tech | 2.23 | 40 | 17 | 415 | 122 | 3.40 | 2.35 |
| Industrial Products | 2.34 | 14 | 6 | 93 | 29 | 3.21 | 2.33 |
| Consumer Discretionary | 2.26 | 17 | 14 | 135 | 54 | 2.50 | 1.21 |
| Consumer Staples | 0.14 | 19 | 11 | 91 | 47 | 1.94 | 1.73 |
| Business Service | -0.21 | 8 | 11 | 68 | 39 | 1.74 | 0.73 |
| Utilities | -0.27 | 23 | 18 | 116 | 71 | 1.63 | 1.28 |
| Medical | 0.36 | 18 | 29 | 213 | 140 | 1.52 | 0.62 |
| Aerospace | 0.95 | 4 | 6 | 37 | 33 | 1.12 | 0.67 |
| Construction | -5.29 | 3 | 7 | 35 | 34 | 1.03 | 0.43 |
| Finance | 2.97 | 40 | 35 | 403 | 404 | 1.00 | 1.14 |
| Basic Materials | -3.68 | 11 | 12 | 76 | 81 | 0.94 | 0.92 |
| Oils and Energy | 0.01 | 12 | 26 | 195 | 234 | 0.83 | 0.46 |
| Retail/Wholesale | 0.75 | 11 | 29 | 130 | 163 | 0.80 | 0.38 |
| S&P | 1.05 | 238 | 226 | 2235 | 1479 | 1.51 | 1.05 |
Revisions: Earnings
The Zacks Revisions Ratio: 2011
- Revisions ratio for full S&P 500 at 1.05 up from 0.85, still in neutral territory.
- Transportation and Autos have highest revisions ratios, small totals.
- Tech still strongest of major sectors, Industrials also strong.
- Nine sectors with positive revisions ratios, seven with ratios below 1.0.
- Ratio of firms with rising estimates to falling mean estimates at 0.80 up from 0.63. Now a neutral reading.
- Eight sectors have more firms with falling mean estimates that rising estimates.
- Total number of revisions (4-week total) at 3,523, up from 2,580 (36.6%).
- Increases up to 1,792 from 1,182 (51.6%) cuts rise to 1,731 from 1,398 (23.8%).
| Sector | %Ch Next Fiscal Yr Est - 4 wks | # Firms Up | # Firms Down | # Ests Up | # Ests Down | Revisions Ratio | Firms up/down |
| Transportation | 3.51 | 9 | 0 | 116 | 8 | 14.50 | 999.99 |
| Auto | 5.29 | 5 | 1 | 42 | 4 | 10.50 | 5.00 |
| Computer and Tech | 1.39 | 35 | 24 | 348 | 127 | 2.74 | 1.46 |
| Industrial Products | 0.83 | 12 | 8 | 87 | 34 | 2.56 | 1.50 |
| Consumer Staples | -0.05 | 21 | 10 | 87 | 43 | 2.02 | 2.10 |
| Consumer Discretionary | 0.86 | 19 | 12 | 110 | 68 | 1.62 | 1.58 |
| Conglomerates | -0.29 | 4 | 4 | 36 | 26 | 1.38 | 1.00 |
| Business Service | -0.13 | 5 | 12 | 59 | 47 | 1.26 | 0.42 |
| Medical | 0.14 | 19 | 27 | 194 | 180 | 1.08 | 0.70 |
| Basic Materials | -0.06 | 12 | 11 | 71 | 79 | 0.90 | 1.09 |
| Utilities | -0.66 | 15 | 26 | 85 | 101 | 0.84 | 0.58 |
| Oils and Energy | -3.35 | 9 | 29 | 157 | 238 | 0.66 | 0.31 |
| Aerospace | -0.23 | 3 | 7 | 27 | 41 | 0.66 | 0.43 |
| Retail/Wholesale | -1.16 | 11 | 29 | 96 | 174 | 0.55 | 0.38 |
| Finance | -2.76 | 27 | 49 | 260 | 507 | 0.51 | 0.55 |
| Construction | -7.27 | 1 | 9 | 17 | 54 | 0.31 | 0.11 |
| S&P | -0.59 | 207 | 258 | 1792 | 1731 | 1.04 | 0.80 |
Total Income and Share
- S&P 500 earned $547.4 billion in 2009, expected to earn $765.2 billion in 2010, $890.7 billion in 2011.
- Finance share of total earnings moves from 5.9% in 2009 to 17.4% in 2010, 18.4% in 2011, regains total earnings crown from Tech.
- Medical share of total earnings far exceeds market cap share (index weight), but earnings share expected to shrink from 17.4% in 2009 to 12.4% in 2011.
- Market Cap shares of Construction, Transportation, Industrials and Business Service sectors far exceed both 2010 and 2011 earnings shares.
| Sector | Total Net Income $ 2009 | Total Net Income $ 2010 | Total Net Income $ 2011 | % Total S&P Earn 2009 | % Total S&P Earn 2010 | % Total S&P Earn 2011 | % Total S&P Mkt Cap |
| Computer and Tech | $93,415 | $137,121 | $154,446 | 17.07% | 17.92% | 17.34% | 18.13% |
| Finance | $32,292 | $126,704 | $163,738 | 5.90% | 16.56% | 18.38% | 16.59% |
| Medical | $95,348 | $101,396 | $110,106 | 17.42% | 13.25% | 12.36% | 10.66% |
| Oils and Energy | $62,360 | $89,640 | $109,389 | 11.39% | 11.71% | 12.28% | 10.38% |
| Retail/Wholesale | $51,555 | $58,247 | $65,826 | 9.42% | 7.61% | 7.39% | 8.14% |
| Consumer Staples | $47,016 | $53,085 | $58,789 | 8.59% | 6.94% | 6.60% | 7.31% |
| Utilities | $49,177 | $50,580 | $54,232 | 8.98% | 6.61% | 6.09% | 6.35% |
| Consumer Discretionary | $33,804 | $39,032 | $44,892 | 6.18% | 5.10% | 5.04% | 6.09% |
| Conglomerates | $25,078 | $24,773 | $26,800 | 4.58% | 3.24% | 3.01% | 3.69% |
| Basic Materials | $13,255 | $20,792 | $26,449 | 2.42% | 2.72% | 2.97% | 3.11% |
| Aerospace | $13,296 | $15,371 | $17,109 | 2.43% | 2.01% | 1.92% | 1.79% |
| Business Service | $11,713 | $13,179 | $15,331 | 2.14% | 1.72% | 1.72% | 2.11% |
| Industrial Products | $10,613 | $13,014 | $16,021 | 1.94% | 1.70% | 1.80% | 2.20% |
| Transportation | $8,282 | $11,094 | $13,652 | 1.51% | 1.45% | 1.53% | 1.92% |
| Auto | $480 | $8,967 | $10,907 | 0.09% | 1.17% | 1.22% | 1.01% |
| Construction | -$324 | $2,194 | $3,028 | -0.06% | 0.29% | 0.34% | 0.51% |
| S&P 500 | $547,360 | $765,190 | $890,716 | 100.00% | 100.00% | 100.00% | 100.00% |
P/E Ratios
- Trading at 13.6x 2010, 11.7x 2011 earnings, or earnings yields of 7.35% and 8.55%, respectively.
- Earnings Yields extremely attractive relative to 10-year T-Note rate of 2.92%.
- Medical has lowest P/E based on 2009 and 2010 earnings.
- Construction has highest P/E for 2010 and 2011.
- Auto and Finance high 2009 P/E’s to fall dramatically in 2010 and 2011.
- S&P 500 earned $57.98 in 2009, $81.00 in 2010 and $94.15 in 2011 expected.
| P/E | 2008 | 2009 | 2010 | 2011 |
| Medical | 11.9 | 11.7 | 11.0 | 10.1 |
| Auto | NM | 218.6 | 11.7 | 9.6 |
| Oils and Energy | 7.5 | 17.4 | 12.1 | 9.9 |
| Aerospace | 12.0 | 14.1 | 12.2 | 10.9 |
| Utilities | 11.6 | 13.5 | 13.1 | 12.2 |
| Finance | NM | 53.6 | 13.7 | 10.6 |
| Computer and Tech | 19.4 | 20.2 | 13.8 | 12.2 |
| Consumer Staples | 17.2 | 16.2 | 14.4 | 13.0 |
| Retail/Wholesale | 16.9 | 16.5 | 14.6 | 12.9 |
| Conglomerates | 11.7 | 15.3 | 15.5 | 14.4 |
| Basica Materials | 12.2 | 24.5 | 15.6 | 12.3 |
| Consumer Discretionary | 16.7 | 18.8 | 16.3 | 14.1 |
| Busines Service | 19.0 | 18.8 | 16.7 | 14.4 |
| Industrial Products | 13.7 | 21.7 | 17.7 | 14.3 |
| Transportation | 16.9 | 24.1 | 18.0 | 14.6 |
| Construction | NM | NM | 24.4 | 17.7 |
| S&P | 19.3 | 19.0 | 13.6 | 11.7 |
Biggest FY1 Revisions
The table below shows the S&P 500 firms with the biggest increases in their FY1 (mostly 2010) mean estimate over the last 4 weeks. To qualify, the current mean estimate has to be greater than $0.50 and there must be more than 3 estimates for FY1. In addition to the change in the mean estimate, the net percentage of estimates being raised is shown for both FY1 and FY2, as well as the P/E ratios based on each year’s earnings is shown.
Note that estimate momentum and value are not mutually exclusive, and that two of the firms with the biggest positive estimate momentum have single-digit P/Es based on FY1 earnings. The most interesting of these firms will be where the net revisions percentage (#up-#dn/Tot) is more than 0.50 but less than 1.00.
Big mean estimate changes based on a handful of individual revisions are suspect, but could prove to be the most interesting if other analysts follow suit. On the other hand if all the analysts have raised their estimates already, the mean estimate is less likely to rise again over the next month.
| Company | Ticker | %Ch Curr Fiscal Yr Est - 4 wks | %Ch Next Fiscal Yr Est - 4 wks | # Up-Dn/Tot %Ch Curr Fiscal Yr Est - 4 wks | # Up-Dn/Tot %Ch Next Fiscal Yr Est - 4 wks | P/E using Curr FY Est | P/E using Next FY Est |
| Comerica Inc | CMA | 56.97% | -2.75% | 0.73 | -0.13 | 54.31 | 17.02 |
| Ford Motor Co | F | 31.03% | 20.27% | 0.77 | 0.92 | 7.35 | 6.78 |
| Valero Energy | VLO | 30.64% | 3.59% | 0.62 | 0.21 | 12.57 | 7.60 |
| Halliburton Co | HAL | 29.01% | 16.68% | 0.91 | 0.84 | 16.29 | 12.48 |
| Capital One Fin | COF | 26.93% | 3.70% | 0.84 | 0.25 | 9.14 | 9.85 |
| Tellabs Inc | TLAB | 21.57% | 11.49% | 0.80 | 0.33 | 12.85 | 12.88 |
| Harley-Davidson | HOG | 21.40% | 2.77% | 0.90 | 0.27 | 19.92 | 13.11 |
| Adv Micro Dev | AMD | 19.49% | 12.60% | 0.79 | 0.48 | 13.51 | 10.64 |
| Linear Tec Corp | LLTC | 17.84% | 15.32% | 0.84 | 0.53 | 12.81 | 12.31 |
| Xilinx Inc | XLNX | 17.78% | 15.99% | 0.91 | 0.95 | 11.34 | 10.98 |
| Du Pont (Ei) De | DD | 15.05% | 7.90% | 1.00 | 0.64 | 13.44 | 12.80 |
| Novellus Sys | NVLS | 14.75% | 10.43% | 0.93 | 0.67 | 9.50 | 7.74 |
| Wynn Resrts Ltd | WYNN | 14.64% | 12.33% | 0.33 | 0.21 | 61.22 | 43.58 |
| Paccar Inc | PCAR | 14.45% | 4.32% | 0.76 | 0.47 | 39.99 | 19.09 |
| Sandisk Corp | SNDK | 14.35% | 19.24% | 0.89 | 0.80 | 10.89 | 11.22 |
| Caterpillar Inc | CAT | 14.33% | 7.35% | 0.70 | 0.71 | 19.20 | 13.86 |
| Altera Corp | ALTR | 14.02% | 12.68% | 0.96 | 0.91 | 12.27 | 12.39 |
| Cummins Inc | CMI | 13.12% | 8.21% | 0.47 | 0.47 | 18.30 | 13.63 |
| Whirlpool Corp | WHR | 12.61% | 3.44% | 0.80 | 0.17 | 8.67 | 8.58 |
| Jpmorgan Chase | JPM | 12.36% | -2.10% | 0.58 | -0.38 | 11.24 | 8.60 |
| Memc Elec Matrl | WFR | 12.14% | 2.01% | 0.18 | 0.10 | 13.01 | 8.25 |
| Northrop Grummn | NOC | 11.55% | -0.84% | 0.86 | -0.33 | 8.75 | 8.57 |
| Kla-Tencor Corp | KLAC | 11.03% | -17.57% | 0.40 | -0.33 | 9.47 | 12.74 |
| Intel Corp | INTC | 10.61% | 9.74% | 0.98 | 0.95 | 9.96 | 9.51 |
Data in this report, unless stated otherwise, is through the close on Thursday 7/29/2010.
We use the convention of referring to the next full fiscal year to be completed as 2010, not all firms are on December fiscal years, this can cause discontinuities in the data, particularly around this time of year. The data is based on FY1, not based on 2010, even though I may call it 2010 in the report. All numbers, including historical ones, reflect the current composition of the S&P 500, thus some historical numbers may differ from those reported by S&P which are based on the composition of the index at the time of the reports.
Dirk van Dijk, CFA is the Chief Equity Strategist for Zacks.com. With more than 25 years investment experience he has become a popular commentator appearing in the Wall Street Journal and on CNBC. Dirk is also the Editor in charge of the market beating Zacks Strategic Investor service.