Having moved halfway through this earnings season, we note that the picture so far is quite positive. Per the latest Earnings Outlook ,dated May 2, 343 S&P 500 members have reported quarterly results. Well, 78.4% of these companies have delivered positive earnings surprises, while 75.8% beat top-line expectations.
Earnings of these companies have increased 24% from the year-ago quarter, while revenues have risen 9.5%.Further, the earnings trend report suggests that the top and the bottom line performances in this season are on track to mark the highest growth rate in seven years. As a whole, earnings for the S&P 500 companies are projected to improve 23.1% year over year on revenue growth of 8.6%. In fourth-quarter 2017, earnings and revenues rose 13.4% and 8.6%, respectively.
A Glimpse of the Consumer Staples Sector
The performance of the index is determined by all 16 Zacks sectors, all of which are expected to witness year-over-year earnings growth this season. The Consumer Staplessector is expected to record earnings growth of 7.3% and revenue increase of 3.9%.
The Consumer Staples sector is currently placed at the bottom 6% (15 of 16) of all Zacks sectors. Well, the segment has been grappling with headwinds such as rising input costs as well as intense competition that has increased promotional spending. This, in turn, has created significant pricing pressure. Thanks to such deterrents, the sector has lost 10.4% in a year, against the S&P 500 index’s gain of 9.8%.