Summary of Q2 2010 S&P 500 earnings

July 12th kicked off Q2 2010 earnings season and I wanted to share some brief information and statistics of the earnings reported so far. Earnings season can prove to be a very volatile time depending on how investors read the data. Many times the market will run-up during announcements and then fall back down to where it was once the hype is over. Investors need to be careful when looking at headline numbers on TV and to always put the numbers and stock price in perspective. Just like most economic data, earnings numbers are old and the market likes to look out 3-6 months. Many times it’s not even about the earnings, but what the CEO or CFO have to say about future quarters. Also, keep in mind that the earnings reported are quarterly, year over year comparisons. Remember how bad things were back in Q2 2009? Now that I have all that out let’s get to the statistics.

Only 15% of companies have reported earnings(75 of the 497) and a large amount of those have been Financials(28%), Information Technology(19%), and Consumer Discretionary(13%). These sectors were beat up last year and although the rebound is expected, it’s nice to see them recovering. Many sectors such as Health Care, Telecom, Consumer Staples, Energy, and Materials have not had many companies report yet, but I think the trend will be about the same.

Overall, we’re off to a great start with total sales growth of 9.41% and earnings growth of 58.83%. Earnings continue to be great as most companies have cut their workforce and slowed expenditures while they wait for more certainty in the economy. The sales growth rate has been getting a lot of attention in the news because it is not higher, but I don’t think 9.41% is that bad. Companies are showing signs of increased sales, but just not as much as some were hoping. As we continue to see earnings over the next few weeks I will update you on where they stand.

Marcus Green