Key Points:
However, soaring net margins have been the primary driver of the earnings growth. Analysts have responded to the better-than-expected results by raising their estimates, but much more so for 2010 than for 2011.
The (relative) lack of upward revisions for 2011 might be a yellow flag. To be more specific, the revisions ratio for 2010 has soared to 2.23 as we approach the peak time for estimate revisions activity -- well more than 2 estimate increases for each estimate cut. Since the third quarter is part of fiscal year 2010, if a company beats by say $0.05, an analyst has to raise his fiscal year 2010 estimate or he is implicitly cutting his forecast for the fourth quarter.
An increase for fiscal 2011 means that the analyst sees the better-than-expected results for the third quarter as being sustainable at least in the medium term. The revisions ratio for 2011 is also in positive territory, but still far lower at 1.30. That is somewhat disappointing when almost four times as many firms beat the consensus in the third quarter as disappointed.
Tempered Earnings Season, but Still Strong
The earnings reports over the last week were not quite as stellar as those that came early in the season, but it is still shaping up as a very strong earnings season, mostly due to the continued expansion of net margins. Much of the margin expansion is due to the financials, were the whole concept of revenues is a bit different from most companies, and thus the concept of net margins is also a bit different.
However, even if the financials are excluded, net margins continue to march northward. Earnings growth so far has been stellar at 27.4% year over year, although that is down from the over 30% levels we were seeing earlier in the reporting season. The remaining 64 companies left to report are in aggregate expected to post year-over-year earnings growth of just 7.8%. However, if they all come in exactly on target, they only represent less than 11% of the remaining earnings for the quarter, and thus will not greatly affect the final number for the quarter.
The expectations for the full year are very healthy, with total net income for 2010 expected to rise to $774.9 billion in 2010, up from $545.9 billion in 2009. In 2011, the total net income for the S&P 500 should be $885.9 billion, or increases of 42.0% and 14.3%, respectively. Translated to “EPS” for the index that would be $57.60 for 2009, $81.95 for 2010, and 93.21 for 2011.
The Economy and the Mid-Terms
In an environment where the 10-year T-note is yielding just 2.49%, a P/E of 14.9x based on 2010 and 13.1x based on 2011 earnings looks attractive. Much of the $600 billion in newly created money from QE2 is likely to eventually find its way into the equity market (not directly, but eventually). Historically, the year after mid-term elections has almost always been a good one for the stock market.
On the other hand, there is a very real prospect of total political gridlock, which would greatly raise uncertainty about governmental policy and the strength of the economy that could undermine confidence. The additional monetary stimulus will help boost the economy a little bit, but that could very easily be offset by a concretionary fiscal policy.
The economy needs more fiscal stimulus, not less. Unfortunately, most of the electorate is not very well schooled in macroeconomics and clearly disagreed with this sentiment on Tuesday. The theoretical danger of QE2 is that it could lead to much higher inflation, but with the massive amount of slack in the economy right now, that risk seems pretty remote right now.
QE2 should take the risk of deflation off the table. The economy does seemed to have made a slow turn towards recovery, and one that has even started to show in the employment picture as the economy has created 874,000 jobs over the last year, and that is in the face of large job losses from government (mostly state and local). The private sector has created 1.1 million jobs over the last year. A premature move to fiscal austerity threatens that progress.
Scorecard & Earnings Surprise
Sales Surprises
Reported Quarterly Growth: Total Net Income
Expected Quarterly Growth: Total Net Income
Quarterly Growth: Total Revenues Reported
This table shows the growth of the 436 firms that have actually reported.
Quarterly Growth: Total Revenues Expected
Quarterly Net Margins Reported
Quarterly Net Margins Expected
Annual Total Net Income Growth
Annual Total Revenue Growth
Annual Net Margins
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, there must be more than 3 estimates for FY1, and have a mean estimate of more than $0.50. 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. 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, November 4, 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.
- Just about 7/8ths done, 436 or 87.2% of S&P 500 reports in so far.
- Great season so far, with a median EPS surprise of 4.98%, and a 3.87 surprise ratio. While those numbers are down from earlier in the reporting season, they are still very good. Total of 317 positive surprises and just 82 disappointments. Positive year-over-year growth for 335, falling EPS for 97 firms, 3.45 ratio. 72.7% of all reporting firms do better than expected, 79.4% report positive year-over-year growth. Total net income reported up 27.4%.
- Sales Surprise ratio at 1.54, median surprise 0.86%; 56.9% of all firms do better than expected on top line. Revenue growth healthy at 7.83%. Excluding financials, revenue growth 8.24%.
- Net margins among the 436 firms with reports in fall to 9.71% from 9.73 in the second quarter but far above the 8.22% year-ago level. Excluding financials net margins rise to 9.39% from 9.30% in the second quarter and 8.21% a year ago.
- Total net income (for those yet to report) for the S&P 500 in the third quarter of 2010 is expected to rise 7.8% over third quarter of 2009 levels. Slowdown from the 9.3% growth those same firms had in the second quarter. In the fourth quarter, these firms are expected to post a year-over-year decline of 5.2%. With 89% of total expected net income in, these remaining firms are not likely to significantly alter the overall earnings picture.
- Net margins (among the 64 yet to report) expected to be 6.04% from up from 5.58% a year ago, and up from the 5.68% those firms reported in the second quarter. Excluding financials net margins expected to rise from 5.09% last year to 5.30% in the third quarter, but down from 5.61% in the second quarter.
- Full-year total earnings for the S&P 500 expected to jump 42.0% in 2010, 14.3% further in 2011. Total revenues for the S&P 500 expected to rise 5.11% in 2010, 5.69% 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 or in 2011.
- Net Margins marching higher, from 5.90% in 2008 to 6.42% in 2009 to 8.95% expected for 2010, 9.37% expected for 2011. Major source of earnings growth. Net margins ex-financials: 7.81% in 2008, 7.13% in 2009, 8.67% expected for 2010, 8.62% in 2011.
- Revisions ratio for full S&P 500 at 2.23 for 2010, at 1.37 for 2011, an improvement from last week. Ratio of firms with rising to falling mean estimates at 1.80 for 2010, 1.30 for 2011. Total revisions activity picking up and will probably peak in about two weeks.
- S&P500 earned $545.9 billion in 2009, expected to earn $774.9 billion in 2010, $885.9 billion in 2011.
- S&P 500 earned $57.60 in 2009: $81.95 in 2010 and $93.21 in 2011 expected.
- Bottom up puts P/E's at 21.2x for 2009, 14.9x for 2010, and 13.1x for 2011.
- Top Down estimates: $80.42 for 2010, $91.39 for 2011.
However, soaring net margins have been the primary driver of the earnings growth. Analysts have responded to the better-than-expected results by raising their estimates, but much more so for 2010 than for 2011.
The (relative) lack of upward revisions for 2011 might be a yellow flag. To be more specific, the revisions ratio for 2010 has soared to 2.23 as we approach the peak time for estimate revisions activity -- well more than 2 estimate increases for each estimate cut. Since the third quarter is part of fiscal year 2010, if a company beats by say $0.05, an analyst has to raise his fiscal year 2010 estimate or he is implicitly cutting his forecast for the fourth quarter.
An increase for fiscal 2011 means that the analyst sees the better-than-expected results for the third quarter as being sustainable at least in the medium term. The revisions ratio for 2011 is also in positive territory, but still far lower at 1.30. That is somewhat disappointing when almost four times as many firms beat the consensus in the third quarter as disappointed.
Tempered Earnings Season, but Still Strong
The earnings reports over the last week were not quite as stellar as those that came early in the season, but it is still shaping up as a very strong earnings season, mostly due to the continued expansion of net margins. Much of the margin expansion is due to the financials, were the whole concept of revenues is a bit different from most companies, and thus the concept of net margins is also a bit different.
However, even if the financials are excluded, net margins continue to march northward. Earnings growth so far has been stellar at 27.4% year over year, although that is down from the over 30% levels we were seeing earlier in the reporting season. The remaining 64 companies left to report are in aggregate expected to post year-over-year earnings growth of just 7.8%. However, if they all come in exactly on target, they only represent less than 11% of the remaining earnings for the quarter, and thus will not greatly affect the final number for the quarter.
The expectations for the full year are very healthy, with total net income for 2010 expected to rise to $774.9 billion in 2010, up from $545.9 billion in 2009. In 2011, the total net income for the S&P 500 should be $885.9 billion, or increases of 42.0% and 14.3%, respectively. Translated to “EPS” for the index that would be $57.60 for 2009, $81.95 for 2010, and 93.21 for 2011.
The Economy and the Mid-Terms
In an environment where the 10-year T-note is yielding just 2.49%, a P/E of 14.9x based on 2010 and 13.1x based on 2011 earnings looks attractive. Much of the $600 billion in newly created money from QE2 is likely to eventually find its way into the equity market (not directly, but eventually). Historically, the year after mid-term elections has almost always been a good one for the stock market.
On the other hand, there is a very real prospect of total political gridlock, which would greatly raise uncertainty about governmental policy and the strength of the economy that could undermine confidence. The additional monetary stimulus will help boost the economy a little bit, but that could very easily be offset by a concretionary fiscal policy.
The economy needs more fiscal stimulus, not less. Unfortunately, most of the electorate is not very well schooled in macroeconomics and clearly disagreed with this sentiment on Tuesday. The theoretical danger of QE2 is that it could lead to much higher inflation, but with the massive amount of slack in the economy right now, that risk seems pretty remote right now.
QE2 should take the risk of deflation off the table. The economy does seemed to have made a slow turn towards recovery, and one that has even started to show in the employment picture as the economy has created 874,000 jobs over the last year, and that is in the face of large job losses from government (mostly state and local). The private sector has created 1.1 million jobs over the last year. A premature move to fiscal austerity threatens that progress.
Scorecard & Earnings Surprise
- 436 of the S&P 500 firms have reported 3Q earnings. The remaining firms are unlikely to significantly change the overall results. Four sectors are done and five more are over 90% done.
- Strong season so far with a median surprise of 4.98%, and a 3.87 surprise ratio (317 beats, 82 misses); 76.8% of all firms reporting beat expectations.
- Positive year-over-year growth for 346, falling EPS for 87 firms, 3.45 ratio, 79.4% of all firms reporting have higher EPS than last year.
- Total net income up 27.4%. All sectors but Construction have more positive surprises than disappointments. Six sectors have surprise ratios of 6:1 or better.
| Income Surprises | Yr/Yr Growth | % Reported | Surprise Median | EPS Surp Pos | EPS Surp Neg | # Grow Pos | # Grow Neg |
| Retail/Wholesale | 12.85% | 51.11% | 9.80 | 21 | 2 | 20 | 3 |
| Conglomerates | 6.97% | 70.00% | 8.00 | 7 | 1 | 5 | 2 |
| Consumer Discretionary | 21.39% | 84.85% | 7.90 | 20 | 4 | 26 | 2 |
| Auto | 90.75% | 100.00% | 7.24 | 5 | 1 | 5 | 1 |
| Computer and Tech | 50.99% | 81.43% | 6.90 | 45 | 4 | 50 | 6 |
| Finance | 34.75% | 97.44% | 6.13 | 51 | 19 | 48 | 28 |
| Industrial Products | 38.66% | 85.00% | 4.65 | 13 | 3 | 12 | 5 |
| Business Service | 15.62% | 94.74% | 4.38 | 16 | 1 | 15 | 3 |
| Medical | 11.21% | 93.62% | 4.14 | 37 | 3 | 33 | 11 |
| Oils and Energy | 37.23% | 94.87% | 4.08 | 22 | 13 | 29 | 8 |
| Transportation | 65.17% | 100.00% | 4.00 | 8 | 1 | 9 | 0 |
| Utilities | 6.75% | 95.35% | 3.48 | 24 | 12 | 30 | 11 |
| Consumer Staples | 5.83% | 78.95% | 2.90 | 21 | 5 | 20 | 9 |
| Aerospace | 155.06% | 100.00% | 2.83 | 8 | 1 | 9 | 1 |
| Basic Materials | 42.34% | 100.00% | 2.70 | 15 | 8 | 19 | 4 |
| Construction | 96.28% | 72.73% | 0.00 | 4 | 4 | 5 | 3 |
| S&P | 27.44% | 87.20% | 4.98 | 317 | 82 | 335 | 97 |
Sales Surprises
- Sales Surprise ratio at 1.54, median surprise 0.86%, 56.9% of all firms do better than expected on top line.
- Growing Revenues outnumber falling revenues by ratio of 3.89, 79.4% of firms have higher revenues than a year ago.
- Revenue growth healthy at 7.83% but still greatly lags earnings growth pointing to net margin expansion (see net margin tables below).
| Sales Surprises | Yr/Yr Growth | % Reported | Surprise Median | Sales Surp Pos | Sales Surp Neg | # Grow Pos | # Grow Neg |
| Auto | 5.02% | 100.00% | 2.663 | 4 | 2 | 5 | 1 |
| Basica Materials | 17.45% | 100.00% | 2.654 | 16 | 7 | 23 | 0 |
| Finance | -3.73% | 97.44% | 2.484 | 38 | 12 | 48 | 28 |
| Busines Service | 7.68% | 94.74% | 1.563 | 14 | 4 | 17 | 1 |
| Retail/Wholesale | 4.81% | 51.11% | 1.351 | 16 | 7 | 19 | 4 |
| Computer and Tech | 23.44% | 81.43% | 1.317 | 42 | 15 | 53 | 4 |
| Construction | 5.86% | 72.73% | 1.234 | 6 | 3 | 6 | 3 |
| Industrial Products | 22.89% | 85.00% | 0.704 | 10 | 7 | 14 | 3 |
| Oils and Energy | 16.04% | 94.87% | 0.634 | 22 | 15 | 32 | 5 |
| Consumer Discretionary | 4.40% | 84.85% | 0.428 | 17 | 11 | 23 | 5 |
| Medical | 8.68% | 93.62% | 0.072 | 23 | 21 | 30 | 13 |
| Transportation | 16.71% | 100.00% | -0.051 | 4 | 5 | 9 | 0 |
| Consumer Staples | 3.64% | 78.95% | -0.567 | 11 | 18 | 22 | 8 |
| Utilities | 5.71% | 95.35% | -1.28 | 19 | 22 | 32 | 9 |
| Conglomerates | -0.09% | 70.00% | -1.706 | 3 | 5 | 5 | 3 |
| Aerospace | 2.36% | 100.00% | -2.31 | 3 | 7 | 8 | 2 |
| S&P | 7.83% | 87.20% | 0.864 | 248 | 161 | 346 | 89 |
Reported Quarterly Growth: Total Net Income
- The first table shows the actual reported growth of those that have already reported (436), and the second table showing the expected growth for the firms that have yet to report (64).
- The total net income of firms that have reported so far is 27.4% above what they reported in the third quarter of 2009. These same firms reported year-over-year growth of 41.5% in the second quarter. Sequential earnings growth is 0.9%.
- Thirteen sectors reporting showing double-digit earnings growth, nine with more than 30% growth. Cyclical sectors lead the growth parade.
- Only two sectors (Aerospace and Retail) showing acceleration in year-over-year growth from second quarter, twelve decelerate.
- If remaining firms come in exactly on target 89.0% of all net income for the quarter has already reported (and 83.5% of the revenue).
- 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 Q4/Q3 E | Sequential Q3/Q2 A | Year over Year 3Q 10 A | Year over Year 4Q 10 E | Year over Year 2Q 10 A |
| Aerospace | -0.15% | 1.38% | 155.06% | -7.34% | -1.73% |
| Construction | -21.93% | -34.92% | 96.28% | 69.46% | 429.91% |
| Auto | -10.43% | -18.76% | 90.75% | 10.88% | 808.63% |
| Transportation | -1.92% | 5.16% | 65.17% | 31.64% | 73.88% |
| Computer and Tech | 9.44% | 7.42% | 50.99% | 13.46% | 63.41% |
| Basica Materials | -8.04% | -12.87% | 42.34% | 19.11% | 114.14% |
| Industrial Products | -9.54% | 7.47% | 38.66% | 48.79% | 61.72% |
| Oils and Energy | 2.90% | -9.68% | 37.23% | 26.92% | 95.52% |
| Finance | -0.01% | -7.23% | 34.75% | 255.36% | 52.17% |
| Consumer Discretionary | -14.26% | 32.10% | 21.39% | 6.46% | 21.88% |
| Busines Service | 10.77% | 3.13% | 15.62% | 14.72% | 20.01% |
| Retail/Wholesale | -1.91% | 12.62% | 12.85% | 6.35% | 10.07% |
| Medical | -8.62% | -1.05% | 11.21% | 2.53% | 17.87% |
| Conglomerates | 2.30% | -1.99% | 6.97% | 1.87% | 8.33% |
| Utilities | -29.67% | 21.55% | 6.75% | 1.60% | 7.20% |
| Consumer Staples | -8.39% | 6.61% | 5.83% | 3.54% | 7.48% |
| S&P | -3.43% | 0.92% | 27.44% | 26.49% | 41.48% |
Expected Quarterly Growth: Total Net Income
- Total net income for the S&P 500 in the third quarter of 2010 (among those yet to report) is expected to rise 7.8% over third quarter of 2009 levels.
- Slowdown from the 9.3% growth those same firms had in the second quarter. A year-over-year decline of 5.2% expected in the fourth quarter.
- Total third quarter net income expected to be 0.14% below second quarter levels. However, fourth quarter net income is expected to rise 6.3% over third quarter levels.
- Five sectors expected to post double-digit third quarter year-over-year growth, and five sectors are expected to have negative growth.
- The sequential picture is much more downbeat, with only five sectors expected to actually have higher net income in this quarter than in the second quarter. When looking at growth, the base you are growing from matters as much as the levels you are growing to.
| Income Growth | Sequential Q4/Q3 E | Sequential Q3/Q2 E | Year over Year 3Q 10 E | Year over Year 4Q 10 E | Year over Year 2Q 10 A |
| Auto | na | Na | na | na | Na |
| Basica Materials | na | Na | na | na | Na |
| Aerospace | na | Na | na | na | Na |
| Transportation | na | Na | na | na | Na |
| Conglomerates | 20.00% | 300.89% | -28.88% | 149.35% | -83.55% |
| Finance | -93.63% | 52.21% | -3.14% | -93.39% | -35.79% |
| Utilities | -7.94% | 29.02% | -1.58% | -4.78% | -5.35% |
| Consumer Staples | -1.80% | 26.45% | -1.96% | -5.15% | 0.58% |
| Oils and Energy | 2.83% | 15.09% | 49.62% | 22.11% | 25.00% |
| Computer and Tech | 4.01% | 4.60% | 15.17% | 11.36% | 45.12% |
| Medical | 4.36% | 2.12% | 1.60% | 5.92% | -4.27% |
| Retail/Wholesale | 52.70% | -16.40% | 7.25% | 5.48% | 9.49% |
| Busines Service | -2.28% | -17.43% | -3.36% | 3.65% | 26.40% |
| Consumer Discretionary | 35.39% | -24.55% | -3.28% | 2.83% | 41.08% |
| Industrial Products | -14.37% | -29.75% | 188.71% | 33.27% | 57.47% |
| Construction | 18.98% | -49.98% | 142.17% | -36.02% | 374.47% |
| S&P | 6.33% | -0.14% | 7.75% | -5.16% | 9.26% |
Quarterly Growth: Total Revenues Reported
This table shows the growth of the 436 firms that have actually reported.
- Five sectors reporting double-digit revenue growth; financials the biggest drag on revenue growth.
- S&P 500 reported revenues up 7.83% year over year in 3Q, down from 11.43% revenue increase the same firms showed in the 2Q. This is still a very healthy level of revenue growth.
| Sales Growth | Sequential Q4/Q3 E | Sequential Q3/Q2 A | Year over Year 3Q 10 A | Year over Year 4Q 10 E | Year over Year 2Q 09 A |
| Computer and Tech | -2.17% | 4.15% | 23.44% | 13.74% | 23.96% |
| Industrial Products | -2.94% | 3.20% | 22.89% | 19.34% | 20.58% |
| Basic Materials | 3.67% | -0.64% | 17.45% | 7.90% | 18.54% |
| Transportation | -0.27% | 1.22% | 16.71% | 12.68% | 20.20% |
| Oils and Energy | 4.38% | 1.29% | 16.04% | 9.26% | 27.70% |
| Medical | 2.53% | -0.65% | 8.68% | 2.48% | 10.39% |
| Business Service | 0.94% | 1.89% | 7.68% | 5.57% | 7.56% |
| Construction | -10.85% | 1.74% | 5.86% | -3.44% | 8.05% |
| Utilities | -6.32% | 11.78% | 5.71% | 6.79% | 0.40% |
| Auto | -1.83% | -6.73% | 5.02% | -6.83% | 26.09% |
| Retail/Wholesale | 4.25% | 5.08% | 4.81% | 4.85% | 4.89% |
| Consumer Discretionary | -4.03% | 4.97% | 4.40% | 4.40% | 7.25% |
| Consumer Staples | -11.51% | -2.66% | 3.64% | -3.95% | 7.78% |
| Aerospace | -2.34% | 2.47% | 2.36% | 1.32% | -2.25% |
| Conglomerates | -2.21% | -2.82% | -0.09% | 1.39% | 2.01% |
| Finance | -10.65% | -3.00% | -3.73% | -13.83% | 3.42% |
| S&P | 0.18% | 1.10% | 7.83% | 2.45% | 11.43% |
Quarterly Growth: Total Revenues Expected
- Total revenue for the remaining S&P 500 firms expected to fall 0.46% from a year ago, a sharp slowdown from the 6.87% year-over-year growth posted in the second quarter. Falling revenues of 1.39% now expected for the fourth quarter.
- Revenue for the financials is the principal source of the revenue slowdown. Low interest rates depress interest income, which is a major part of financials revenue, but also reduce interest expense. As a result, revenues at financials are notoriously flakey.
- Four sectors expected to post double-digit revenue growth in the third quarter, all of which also posted double-digit growth in the second quarter and are expected be among the leaders again in the fourth quarter. High revenue growth in Energy is largely a function of commodity prices.
| Sales Growth | Sequential Q4/Q3 E | Sequential Q3/Q2 E | Year over Year 3Q 10 E | Year over Year 4Q 10 E | Year over Year 2Q 10 A |
| Auto | Na | na | Na | Na | na |
| Basica Materials | Na | na | Na | Na | na |
| Aerospace | Na | na | Na | Na | na |
| Transportation | Na | na | Na | Na | na |
| Utilities | 9.68% | 31.42% | 39.37% | 22.20% | 13.64% |
| Consumer Staples | -2.90% | 7.50% | 4.39% | 2.20% | 4.11% |
| Oils and Energy | 2.90% | 7.04% | 42.82% | 33.00% | 24.48% |
| Busines Service | -1.26% | 5.26% | 6.37% | 8.24% | 1.64% |
| Computer and Tech | 2.16% | 3.62% | 13.36% | 8.79% | 18.58% |
| Medical | 1.21% | 2.62% | 0.18% | 1.51% | -3.37% |
| Consumer Discretionary | 12.52% | 2.14% | 0.95% | 5.81% | 10.96% |
| Retail/Wholesale | 14.55% | -2.61% | 3.30% | 3.48% | 3.81% |
| Industrial Products | -16.47% | -3.22% | 22.23% | 9.87% | 16.38% |
| Conglomerates | 1.62% | -5.12% | -5.44% | -0.70% | 3.58% |
| Construction | -4.08% | -11.01% | -3.06% | -7.53% | 7.32% |
| Finance | -15.71% | -66.52% | -64.57% | -70.59% | 6.45% |
| S&P 500 | 8.75% | -6.09% | -0.46% | -1.39% | 6.87% |
Quarterly Net Margins Reported
- This is only for the 436 firms that have already reported, calculated as total net income for the sector divided by total revenues for the sector. As more firms report, both the reported and estimated net margins will change.
- Net margins for S&P 500 expand to 9.71% from 8.22% a year ago, but down from the 9.73% reported by these same firms in the second quarter. Net margins ex-financials rise to 9.39% from 8.21% a year ago.
- All sectors reporting year over year increase in margins, nine see sequential improvement.
- Some sectors will see bigger seasonal swings in margins than others.
- Five sectors reporting double-digit net margins so far.
| Net Margins | Q4 2010 Estimated | Q3 2010 Reported | 2Q 2010 Reported | 1Q 2010 Reported | 4Q 2009 Reported | 3Q 2009 Reported |
| Computer and Tech | 20.02% | 19.83% | 19.22% | 18.01% | 20.07% | 16.21% |
| Business Service | 13.61% | 12.89% | 12.74% | 12.41% | 12.52% | 12.01% |
| Consumer Staples | 12.05% | 12.87% | 11.75% | 11.54% | 11.17% | 12.60% |
| Finance | 13.16% | 11.58% | 12.11% | 11.12% | 3.19% | 8.27% |
| Consumer Discretionary | 8.52% | 10.40% | 8.27% | 8.24% | 8.36% | 8.95% |
| Medical | 8.84% | 9.96% | 10.00% | 9.96% | 8.84% | 9.73% |
| Conglomerates | 8.53% | 9.09% | 9.02% | 7.17% | 8.49% | 8.49% |
| Utilities | 6.39% | 9.07% | 8.34% | 8.02% | 6.72% | 8.98% |
| Transportation | 8.09% | 8.49% | 8.17% | 6.09% | 6.93% | 6.00% |
| Industrial Products | 7.26% | 7.98% | 7.66% | 5.71% | 5.82% | 7.07% |
| Oils and Energy | 7.24% | 7.09% | 7.95% | 7.30% | 6.24% | 6.00% |
| Aerospace | 6.36% | 6.72% | 6.79% | 5.94% | 6.96% | 2.70% |
| Basic Materials | 5.93% | 6.27% | 7.15% | 7.39% | 5.37% | 5.18% |
| Auto | 4.91% | 5.45% | 6.26% | 5.12% | 4.13% | 3.00% |
| Retail/Wholesale | 4.23% | 4.50% | 4.20% | 4.64% | 4.17% | 4.18% |
| Construction | 2.00% | 2.40% | 3.75% | 1.57% | 1.14% | 1.29% |
| S&P | 9.41% | 9.71% | 9.73% | 9.11% | 7.58% | 8.22% |
| NM x fin | 8.86% | 9.39% | 9.30% | 8.72% | 8.38% | 8.21% |
Quarterly Net Margins Expected
- Net margins (among the 64 S&P 500 companies yet to report) expected to rise to 6.04% from 5.58% a year ago.
- Sequentially, margins expected to rise from 5.68% in the second quarter but fall to 5.91% in the fourth quarter.
- Excluding financials, margins rise to 5.30% from 5.09% last year, but down from 5.61% in the second quarter.
- Seven sectors expected to see year-over-year growth in margins, five see declines.
| Net Margins | Q4 2010 Estimated | Q3 2010 Estimated | 2Q 2010 Reported | 1Q 2010 Reported | 4Q 2009 Reported | 3Q 2009 Reported |
| Auto | Na | na | na | na | na | Na |
| Basic Materials | Na | na | na | na | na | Na |
| Aerospace | Na | na | na | na | na | Na |
| Transportation | Na | na | na | na | na | Na |
| Finance | 2.23% | 29.49% | 6.49% | 11.23% | 9.91% | 10.79% |
| Medical | 19.83% | 19.23% | 19.32% | 20.11% | 19.00% | 18.96% |
| Oils and Energy | 14.46% | 14.47% | 13.46% | 14.77% | 15.75% | 13.81% |
| Utilities | 9.24% | 11.01% | 11.21% | 8.28% | 11.86% | 15.59% |
| Conglomerates | 12.03% | 10.19% | 2.41% | 10.39% | 4.79% | 13.55% |
| Computer and Tech | 9.49% | 9.32% | 9.24% | 10.42% | 9.28% | 9.18% |
| Consumer Discretionary | 10.57% | 8.78% | 11.89% | 13.28% | 10.88% | 9.17% |
| Industrial Products | 6.96% | 6.79% | 9.36% | 9.63% | 5.74% | 2.88% |
| Consumer Staples | 5.95% | 5.89% | 5.00% | 5.09% | 6.41% | 6.27% |
| Busines Service | 4.39% | 4.44% | 5.65% | 4.66% | 4.58% | 4.88% |
| Retail/Wholesale | 4.30% | 3.23% | 3.76% | 3.35% | 4.22% | 3.11% |
| Construction | 2.31% | 1.87% | 3.32% | 2.55% | 3.35% | -4.29% |
| S&P 500 | 5.91% | 6.04% | 5.68% | 6.26% | 6.14% | 5.58% |
| S&P ex Fin'l | 6.00% | 5.30% | 5.61% | 5.78% | 5.82% | 5.09% |
Annual Total Net Income Growth
- Total S&P 500 Net Income in 2009 was 1.45% above 2008 levels, following a 34.6% plunge in 2008.
- Total earnings for the S&P 500 expected to jump 42.0% in 2010, 14.3% further in 2011.
- Earnings recovery to happen by mid-2011; full-year 2011 earnings to be 6.4% 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 mid-2014 at the earliest.
- 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 or in 2011.
- Retail, Medical and Business Service the only sectors to post positive earnings growth in every year from 2008 through 2011.
- All but three sectors expected to post double-digit growth in 2011.
- Fourteen sectors expected to grow slower in 2011 than 2010, Conglomerates and Staples to see growth accelerate slow growers in 2010).
| Net Income Growth | 2008 | 2009 | 2010 | 2011 |
| Construction | + to - | - to - | - to + | 103.56% |
| Auto | + to - | - to + | 2090.36% | 13.87% |
| Finance | + to - | - to + | 330.56% | 19.34% |
| Basic Materials | -4.89% | -49.92% | 65.08% | 25.02% |
| Oils and Energy | 20.80% | -56.30% | 48.82% | 13.53% |
| Transportation | 1.03% | -30.14% | 43.20% | 19.35% |
| Computer and Tech | 15.00% | -4.22% | 40.56% | 15.91% |
| Industrial Products | 5.32% | -36.74% | 30.16% | 31.96% |
| Consumer Discretionary | 6.27% | -15.87% | 19.68% | 18.57% |
| Aerospace | 13.37% | -14.63% | 15.75% | 5.20% |
| Business Service | 27.20% | 1.02% | 14.72% | 15.54% |
| Retail/Wholesale | 1.39% | 2.59% | 13.65% | 12.58% |
| Consumer Staples | -7.74% | 5.64% | 9.67% | 11.19% |
| Medical | 9.29% | 2.19% | 7.95% | 7.11% |
| Conglomerates | -9.23% | -23.84% | 1.42% | 16.17% |
| Utilities | -1.29% | -13.51% | 1.38% | 4.82% |
| S&P | -34.60% | 1.45% | 41.96% | 14.32% |
Annual Total Revenue Growth
- Total S&P 500 Revenue in 2009 6.75% below 2008 levels.
- Total revenues for the S&P 500 expected to rise 5.05% in 2010, 5.95% in 2011.
- Tech to lead 2010 revenue race, Energy and Industrials to take silver and bronze, but Transportation and Materials to also grow more than 13%.
- All sectors expected to show positive top-line growth in 2011.
- Financials the biggest drag on 2010 revenue growth; Staples only other sector expected to post lower top-line for the year. Revenues for financials are notoriously flakey, low interest rates depress interest income (but also interest expense).
- Revenue growth significantly different if financials are excluded, down 10.46% in 2009, growth of 8.36% in 2010, and 7.00% in 2011.
- Medical, Retail and Aerospace only sectors to have positive revenue growth for all three years.
- Looking out to 2011, Energy the only sector expected to see double digit revenue growth, although four other sectors expected to have revenue growth over 8%.
| Sales Growth | 2009 | 2010 | 2011 |
| Computer and Tech | -6.22% | 22.29% | 7.27% |
| Oils and Energy | -34.49% | 19.33% | 10.98% |
| Industrial Products | -19.55% | 16.47% | 9.99% |
| Basic Materials | -19.30% | 13.74% | 6.81% |
| Transportation | -13.65% | 13.65% | 8.01% |
| Medical | 6.06% | 9.32% | 3.41% |
| Business Service | -2.35% | 7.48% | 6.10% |
| Consumer Discretionary | -9.55% | 7.08% | 6.15% |
| Auto | -21.36% | 6.18% | 8.30% |
| Retail/Wholesale | 1.25% | 5.43% | 5.53% |
| Utilities | -5.87% | 4.08% | 2.58% |
| Conglomerates | -13.27% | 0.93% | 2.41% |
| Construction | -15.92% | -0.02% | 8.63% |
| Aerospace | 6.30% | -0.04% | 5.71% |
| Consumer Staples | -2.13% | -1.08% | 3.95% |
| Finance | 21.16% | -19.24% | 2.08% |
| S&P | -6.75% | 5.11% | 5.69% |
Annual Net Margins
- Net Margins marching higher, from 5.90% in 2008 to 6.42% in 2009 to 8.95% expected for 2010, 9.37% expected for 2011. Major source of earnings growth.
- Financials significantly distort overall net margins. Net margins ex-financials 7.81% in 2008, 7.13% in 2009, 8.67% expected for 2010, 8.62% in 2011.
- Financials net margins soar from -8.50% in 2008 to 15.26% expected for 2011.
- Fourteen sectors seeing higher net margins in 2010 than in 2009. Ten sectors expected to post higher net margins in 2011 than in 2010.
| Net Margins | 2008A | 2009A | 2010E | 2011E | |
| Computer and Tech | 12.30% | 12.56% | 16.46% | 15.60% | |
| Business Service | 10.75% | 11.12% | 12.56% | 12.93% | |
| Finance | -8.50% | 2.45% | 10.53% | 15.26% | |
| Medical | 10.16% | 9.78% | 10.46% | 10.01% | |
| Consumer Staples | 9.25% | 9.99% | 10.24% | 11.84% | |
| Oils and Energy | 9.13% | 6.09% | 9.07% | 7.77% | |
| Consumer Discretionary | 8.05% | 7.48% | 8.92% | 9.34% | |
| Transportation | 7.30% | 5.91% | 8.51% | 8.22% | |
| Conglomerates | 9.31% | 8.18% | 8.29% | 9.32% | |
| Utilities | 8.76% | 8.04% | 8.16% | 8.01% | |
| Industrial Products | 7.47% | 5.87% | 7.66% | 7.87% | |
| Basic Materials | 7.19% | 4.46% | 7.58% | 7.58% | |
| Aerospace | 6.81% | 5.47% | 6.36% | 6.30% | |
| Auto | -2.77% | 0.25% | 5.25% | 5.35% | |
| Retail/Wholesale | 3.50% | 3.54% | 3.89% | 4.08% | |
| Construction | -2.32% | -0.10% | 1.75% | 3.28% | |
| S&P 500 | 5.90% | 6.42% | 8.95% | 9.37% | |
| S&P ex Financials | 7.81% | 7.13% | 8.67% | 8.62% | |
Revisions: Earnings
The Zacks Revisions Ratio: 2010
- Revisions ratio for full S&P 500 at 2.23, up from 2.16 last week -- a very bullish reading.
- Transportation very strong, but three other sectors have revisions ratios above 3.00.
- Fifteen sectors with positive revisions ratios, only Construction below 1.0 and very weak with a revisions ratio of just 0.29.
- Ratio of firms with rising to falling mean estimates at 1.80 down from 1.93 last week, still a bullish reading.
- Total number of revisions (4-week total) up to 4,796 from 3,801 (26.2%).
- Increases up to 3,309 from 2,600 (27.3%), cuts up to 1,487 from 1,201 (23.8%).
- Total Revisions activity increasing. They should peak in about two weeks, then plunge to less than a third of peak levels.
| Sector | %Ch Curr Fiscal Yr Est - 4 wks | # Firms Up | # Firms Down | # Ests Up | # Ests Down | Revisions Ratio | Firms up/down |
| Transportation | 2.09 | 7 | 1 | 121 | 6 | 20.17 | 7.00 |
| Medical | 1.43 | 36 | 11 | 433 | 95 | 4.56 | 3.27 |
| Busines Service | 1.05 | 14 | 5 | 153 | 34 | 4.50 | 2.80 |
| Auto | 1.34 | 5 | 1 | 57 | 16 | 3.56 | 5.00 |
| Computer and Tech | 1.17 | 46 | 20 | 494 | 168 | 2.94 | 2.30 |
| Industrial Products | 3.17 | 13 | 7 | 117 | 41 | 2.85 | 1.86 |
| Aerospace | 1.49 | 8 | 2 | 97 | 37 | 2.62 | 4.00 |
| Retail/Wholesale | 1.70 | 25 | 15 | 234 | 114 | 2.05 | 1.67 |
| Basica Materials | -0.69 | 16 | 7 | 127 | 63 | 2.02 | 2.29 |
| Consumer Discretionary | 1.79 | 20 | 12 | 190 | 98 | 1.94 | 1.67 |
| Conglomerates | -0.33 | 6 | 3 | 61 | 32 | 1.91 | 2.00 |
| Finance | 2.76 | 48 | 29 | 631 | 340 | 1.86 | 1.66 |
| Consumer Staples | -0.23 | 23 | 13 | 141 | 83 | 1.70 | 1.77 |
| Utilities | 0.52 | 24 | 16 | 163 | 101 | 1.61 | 1.50 |
| Oils and Energy | -2.55 | 15 | 23 | 276 | 210 | 1.31 | 0.65 |
| Construction | -1.37 | 4 | 7 | 14 | 49 | 0.29 | 0.57 |
| S&P | 1.00 | 310 | 172 | 3309 | 1487 | 2.23 | 1.80 |
Revisions: Earnings
The Zacks Revisions Ratio: 2011
- Revisions ratio for full S&P 500 at 1.37 up from 1.33, now in bullish territory.
- Transportation, Autos and Industrials have at least three increases per cut.
- Five sectors with negative revisions ratios (below 1.0), eleven with ratios above 1.0.
- Ratio of firms with rising estimate to falling mean estimates at 1.30 up from 1.15; now in bullish territory.
- Construction looks very weak for 2011, more than three cuts per increase.
- Total number of revisions (4-week total) at 4,562, up from 3,615 (26.2%).
- Increases up to 2,639 from 2,065 (27.8%) cuts rise to 1,923 from 1,550 (24.1%).
| Sector | %Ch Next Fiscal Yr Est - 4 wks | # Firms Up | # Firms Down | # Ests Up | # Ests Down | Revisions Ratio | Firms up/down |
| Transportation | 1.39 | 7 | 1 | 101 | 13 | 7.77 | 7.00 |
| Auto | 2.88 | 5 | 1 | 49 | 7 | 7.00 | 5.00 |
| Industrial Products | 2.42 | 16 | 4 | 113 | 31 | 3.65 | 4.00 |
| Business Service | 0.48 | 12 | 7 | 112 | 46 | 2.43 | 1.71 |
| Consumer Discretionary | 1.34 | 21 | 11 | 178 | 79 | 2.25 | 1.91 |
| Medical | 1.36 | 32 | 15 | 352 | 170 | 2.07 | 2.13 |
| Computer and Tech | 0.21 | 40 | 25 | 365 | 192 | 1.90 | 1.60 |
| Basic Materials | -2.06 | 14 | 9 | 107 | 61 | 1.75 | 1.56 |
| Retail/Wholesale | -0.31 | 25 | 16 | 211 | 128 | 1.65 | 1.56 |
| Oils and Energy | -0.10 | 15 | 23 | 278 | 231 | 1.20 | 0.65 |
| Consumer Staples | -0.17 | 25 | 10 | 126 | 108 | 1.17 | 2.50 |
| Finance | -2.60 | 38 | 39 | 437 | 483 | 0.90 | 0.97 |
| Conglomerates | -0.66 | 2 | 6 | 37 | 46 | 0.80 | 0.33 |
| Aerospace | -1.90 | 6 | 4 | 51 | 84 | 0.61 | 1.50 |
| Utilities | -1.25 | 12 | 28 | 103 | 178 | 0.58 | 0.43 |
| Construction | -8.68 | 1 | 9 | 19 | 66 | 0.29 | 0.11 |
| S&P | -0.47 | 271 | 208 | 2639 | 1923 | 1.37 | 1.30 |
Total Income and Share
- S&P 500 earned $545.9 billion in 2009, expected to earn $774.9 billion in 2010, $885.9 billion in 2011.
- Finance share of total earnings moves from 5.8% in 2009 to 17.6% in 2010, 18.4% in 2011, regains total earnings crown.
- Medical share of total earnings far exceeds market cap share (index weight), but earnings share expected to shrink from 17.3% in 2009 to 12.4% in 2011.
- Market Cap shares of Construction, Retail, Transportation, Industrials and Business Service sectors far exceed both 2010 and 2011 earnings shares.
- Finance, Energy and Autos have rising earnings shares and market cap shares well below 2011 earnings shares.
- Staples, Utilities and Medical's share of total net income falling rapidly.
| Income ($ Bill) | 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 |
| Finance | $31,751 | $136,707 | $163,152 | 5.82% | 17.64% | 18.42% | 15.69% |
| Computer and Tech | $92,273 | $129,694 | $150,333 | 16.90% | 16.74% | 16.97% | 18.54% |
| Medical | $94,643 | $102,171 | $109,432 | 17.34% | 13.18% | 12.35% | 10.51% |
| Oils and Energy | $62,732 | $93,360 | $105,994 | 11.49% | 12.05% | 11.96% | 10.80% |
| Consumer Staples | $57,379 | $62,928 | $69,971 | 10.51% | 8.12% | 7.90% | 8.77% |
| Retail/Wholesale | $50,705 | $57,626 | $64,874 | 9.29% | 7.44% | 7.32% | 8.42% |
| Utilities | $49,742 | $50,428 | $52,857 | 9.11% | 6.51% | 5.97% | 6.29% |
| Consumer Discretionary | $23,165 | $27,725 | $32,873 | 4.24% | 3.58% | 3.71% | 4.39% |
| Conglomerates | $26,275 | $26,648 | $30,957 | 4.81% | 3.44% | 3.49% | 3.68% |
| Basic Materials | $13,444 | $22,194 | $27,746 | 2.46% | 2.86% | 3.13% | 3.32% |
| Aerospace | $13,054 | $15,110 | $15,895 | 2.39% | 1.95% | 1.79% | 1.69% |
| Industrial Products | $10,603 | $13,801 | $18,211 | 1.94% | 1.78% | 2.06% | 2.30% |
| Business Service | $11,507 | $13,201 | $15,253 | 2.11% | 1.70% | 1.72% | 2.07% |
| Transportation | $8,202 | $11,745 | $14,018 | 1.50% | 1.52% | 1.58% | 1.95% |
| Auto | $471 | $10,326 | $11,758 | 0.09% | 1.33% | 1.33% | 1.11% |
| Construction | ($73) | $1,259 | $2,562 | -0.01% | 0.16% | 0.29% | 0.47% |
| S&P 500 | $545,873 | $774,922 | $885,886 | 100.00% | 100.00% | 100.00% | 100.00% |
P/E Ratios
- Trading at 14.9x 2010, 13.1x 2011 earnings, or earnings yields of 6.71% and 7.63%, respectively.
- Earnings Yields extremely attractive relative to 10-year T-Note rate of 2.49%.
- Medical has lowest P/E based on 2010 earnings. Autos, Finance, Energy, Medical cheapest based on 2011 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 $57.60 in 2009: $81.95 in 2010 and $93.21 in 2011 expected.
| P/E | 2008 | 2009 | 2010 | 2011 |
| Medical | 13.1 | 12.9 | 11.9 | 11.1 |
| Oils and Energy | NM | 272.2 | 12.4 | 10.9 |
| Aerospace | 12.8 | 14.9 | 12.9 | 12.3 |
| Finance | NM | 57.2 | 13.3 | 11.1 |
| Auto | 8.7 | 19.9 | 13.4 | 11.8 |
| Utilities | 12.6 | 14.6 | 14.4 | 13.8 |
| Basic Materials | 12.3 | 16.2 | 16.0 | 13.8 |
| Consumer Staples | 18.7 | 17.7 | 16.1 | 14.5 |
| Conglomerates | 22.3 | 23.2 | 16.5 | 14.3 |
| Computer and Tech | 19.7 | 19.2 | 16.9 | 15.0 |
| Retail/Wholesale | 14.3 | 28.6 | 17.3 | 13.8 |
| Consumer Discretionary | 21.1 | 20.9 | 18.2 | 15.7 |
| Industrial Products | 18.5 | 21.9 | 18.3 | 15.5 |
| Busines Service | 19.2 | 27.4 | 19.2 | 16.1 |
| Transportation | 15.9 | 25.1 | 19.3 | 14.6 |
| Construction | NM | NM | 43.4 | 21.3 |
| S&P 500 | 21.5 | 21.2 | 14.9 | 13.1 |
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, there must be more than 3 estimates for FY1, and have a mean estimate of more than $0.50. 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. 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 |
| Fifth Third Bk | FITB | 30.71% | 7.34% | 0.82 | 0.46 | 25.85 | 12.30 |
| Parker Hannifin | PH | 29.49% | 18.38% | 0.93 | 0.75 | 14.16 | 12.58 |
| Hartford Fin Sv | HIG | 22.94% | -0.46% | 0.89 | -0.25 | 9.90 | 7.15 |
| Yahoo! Inc | YHOO | 20.86% | 6.47% | 0.80 | 0.22 | 19.23 | 20.41 |
| Capital One Fin | COF | 18.17% | 7.82% | 0.94 | 0.59 | 7.07 | 8.76 |
| Bank Of Amer Cp | BAC | 17.68% | -2.89% | 0.91 | -0.31 | 11.41 | 8.35 |
| Alcoa Inc | AA | 13.34% | 4.90% | 0.64 | 0.33 | 27.34 | 13.63 |
| Legg Mason Inc | LM | 12.36% | 1.63% | 0.80 | 0.20 | 21.90 | 17.27 |
| Ford Motor Co | F | 12.09% | 5.88% | 0.86 | 0.57 | 7.97 | 8.03 |
| Pepco Hldgs | POM | 10.64% | -1.99% | 0.57 | 0.10 | 18.53 | 16.15 |
Data in this report, unless stated otherwise, is through the close on Thursday, November 4, 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.