EPS Beats and Misses %

In Q4 2022, 68% of S&P 500 index constituents surpassed EPS Expectations vs. S&P Capital IQ Estimates, a 2.1% decrease compared to Q3, and down 7.8% compared to Q2. Information Technology and Consumer Discretionary led the individual sectors with 79.5% and 78%, respectively. Health Care rounded out the top three with 75.8% of firms surpassing EPS estimates, up slightly from its Q3 number of 75.4%. Communication Services was again the lowest performing sector with only 52.4% of constituents surpassing expectations, followed closely by Real Estate with 54.8%. The largest drop came from the Energy sector, which fell 21.4% from 85% in Q3, to 63.6% in Q4. Last quarter, Energy was the highest performing sector and its interesting to note this steep drop-off which could signal trouble ahead for the sector after a banner year in 2022.

EPS Growth %

Year-over-year, the S&P 500 index recorded an EPS growth rate of 0.8% for Q4 2022, a significant drop from the Q3 number of 9.2%. This quarter we saw negative earnings growth from five of the eleven sectors, including Communication Services (-30.1%), Real Estate (-19.8%), Financials (-11.5%), Health Care (-4.9%), and Materials (-3.6%). Continuing its strong performance from Q2 and Q3, Energy led the individual sectors with 64.4% year-over-year EPS growth. Although significantly lower than the Q3 number of 135.5%, Energy still well outperformed the other sectors this quarter, with Industrials being the next highest at 19.1%. Consumer Discretionary maintained its third spot from last quarter with 9% but decreased quite a bit from the Q3 number of 21.2%.

Revenue Beats and Misses %

65.5% of firms in the S&P 500 beat S&P Capital IQ Estimates for revenue in Q4, down quite a bit from 70.7% in Q3, and 71.5% in Q2. Utilities led the individual sectors again this quarter with 90% of firms surpassing revenue estimates in Q4 (93% in Q3). The next highest sector was Consumer Discretionary with 72.6%, edging out Consumer Staples just slightly at 72.4%. The lowest performing sector was Materials with only 34.5% of firms surpassing revenue estimates, a 33.4% decrease from Q3. After Materials, Communication Services was the next lowest sector with 50%, followed by Energy with 56.5%.

YoY Revenue Growth %

Overall, Q4 revenue for the S&P 500 grew at 3.1%, year-over-year, a significant decrease from 11.6% in Q3, and 11% in Q2. The year-over-year revenue growth decline was driven by substantial decreases in the Energy and Utilities sector. Last quarter, Energy had 51.6% revenue growth and Utilities had 25.9%. In Q4, these numbers decreased to 14% and 11.3%, respectively. Energy was still the highest growth sector even with the steep decline, followed by Real Estate with 12.3%, and then Utilities. In Q3 we had no negative growth sectors, while this quarter Materials (-5.3%), Information Technology (-3.2), and Communication Services (-0.2%) declined year-over-year.