For Q3 2012, 82 S&P 500
companies have issued negative EPS guidance while 21 companies have
issued positive EPS guidance. If 82 is the final number of companies
issuing negative EPS guidance for the quarter, it will mark the third
highest number for a quarter during the past five years, only trailing
the numbers recorded in Q4 2011 (84) and Q4 2008 (83). If 21 is the
final number of companies issuing positive guidance for the quarter, it
will mark the lowest number of companies for a quarter since FactSet
began tracking guidance in Q1 2006.
As a result, the overall
percentage of companies issuing negative guidance for Q3 2012 stands at
80% (82 out of 103). If this is the final percentage for the quarter, it
will be the highest percentage recorded since FactSet began tracking
guidance data in Q1 2006. The Q4 2011 quarter currently has the record
for the quarter that finished with the highest percentage of companies
issuing negative EPS guidance (73%).
At the sector level (with a
minimum of five companies issuing quarterly EPS guidance), the Health
Care (100%) and Materials (100%) sectors have the highest percentages of
companies that have issued negative EPS preannouncements, while the
Consumer Staples (50%) and Industrials (44%) sectors have the highest
percentage of companies that have issued positive EPS preannouncements.
Although the percentage of
negative preannouncements is running at an all-time high, the market is
not punishing the price performance of these stocks in the short term.
For the 82 companies that have issued negative EPS guidance for Q3 2012
to date, the average price change (2 days before the guidance was issued
through 2 days after the guidance was issued) was 0.0%. This percentage
is above the average over the past five years of -1.8%. Just under half
of the companies (36) that have issued negative guidance have recorded
an increase in price during this time frame. Ten of these companies
witnessed a double-digit increase in price.
For companies that have
issued positive guidance, the story has been even better. Of the 21
companies that have issued positive EPS guidance for Q3 2012, the
average price increase has been +6.7%. This percentage is also well
above the average over the past five years of +2.6%.
On average, companies issued
EPS guidance that was 10.5% below the mean EPS estimate. This difference
is below the trailing 5-year average (-7.8%).
Read more about
the EPS guidance trends of the S&P 500 in this month's edition of
FactSet Guidance Monthly.