Earnings Results: S&P 500 earnings are rising only because of strength in this one sector

by | Aug 19, 2022 | Stock Market

S&P 500 index company earnings for the second quarter were certainly better than expected, but it’s debatable whether overall results were actually good, given that year-over-year growth was due only to the strength of one sector — energy. Also overall earnings-per-share growth has slowed slightly as results from retailers, many with quarters that ended in July, in the past week reported an overall decline in earnings even as revenue rose.

Now that 479, or 95.2%, of S&P 500 companies have reported earnings for the latest quarter through Friday morning, aggregate blended EPS growth, which includes reported results and estimates of still-to-be-reported results, was 6.3%, down from nearly 7% growth seen earlier in the month but up from 5.4% at the end of the first quarter, according to FactSet. Don’t miss: 5 things we’ve learned from earnings season so far: How big an impact is inflation having? The slowing earnings growth comes after the heavy slate of retailers reported in the latest week, including giants like Walmart Inc.
Home Depot Inc.
and Target Corp.
Although 73% of retailers beat EPS expectations, EPS growth for the group was negative 6.4%, according to I/B/E/S data from Refinitiv. Despite the earnings weakness in the retailers sector, driven by actions to get rid of excess inventory and by changing consumer spending habits due to historically high inflation, revenue for the group rose 9.1%. “A retailer-heavy earn …

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