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Q4 Earnings Wrap-Up

By Matt Schreiber – WBI President and Chief Investment Strategist

Recent reports show earnings have hit double-digits and overall revenues are a bit higher than expectations. Could this be the hope needed to float the markets?

Q4 2018 S&P 500 Earnings Recap

According to Bloomberg as of 2/20/19, 420 S&P 500 companies have reported earnings growth of 11% and revenue growth of 6%, which is a bit higher than analysts’ expectations. Any time we start to see double-digit earnings growth we start to feel a bit more confident in the markets. With earnings coming in a bit stronger than the experts think, perhaps we can continue the bull market run.

Q4 Earnings and Revenue by Sector

  1. Utilities – -7.44% earnings growth, 1.96% revenue growth

  2. This sector is biting the bullet this quarter. Thus far, utilities have not shown strong earnings figures. Dividend-focused products tend to hold utilities because of their consistent dividend payments. Unfortunately, utilities have underperformed lately. WBI’s stock screens help us select companies with not only the highest dividend yields, but also the strongest quality fundamentals. As a result, our portfolios are not currently heavily weighted to utilities.  

  3. Industrials – 18.64% earnings growth, 6.83% revenue growth

  4. Given that industrial production has been a bit bleak, they had a fairly good fourth quarter when it comes to earnings growth. I believe the trade-related slowdown has heavily impacted manufacturers. When it comes to the business aspect of industrials, the recent government shutdown has weighed on consumer confidence. Capital expenditure is what drives the business side of industrials.

  5. Financials – -1.36% earnings growth, 3.02% revenue growth

  6. This sector has been a hinderance on what is a good earnings season. Both earnings and revenue growth are looking weak. 

  7. Communication Services – 21.05% earnings growth, 13.03% revenue growth

  8. This sector includes some of both the old tech and consumer discretionary, similar to Amazon-type companies. This sector comes in with the second highest earnings and revenue growth.

For more on this topic, listen to Bull | Bear Radio #62: The Fed is Flip-Flopping through this Winter

Past performance does not guarantee future results. The views presented are those of Matt Schreiber and should not be construed as investment advice. Matt Schreiber or clients of WBI may own stock discussed in this article. All economic and performance information is historical and not indicative of future results. This is not an offer to buy or sell any security. No security or strategy, including those referred to directly or indirectly in this document, is suitable for all accounts or profitable all of the time and there is always the possibility of loss. Moreover, you should not assume that any discussion or information provided here serves as the receipt of, or as a substitute for, personalized investment advice from WBI or from any other investment professional. To the extent that you have any questions regarding the applicability of any specific issue discussed to your individual situation, please consult with WBI or the professional advisor of your choosing. This information is compiled from sources believed to be reliable, accuracy cannot be guaranteed. Information pertaining to WBI’s advisory operations, services, and fees is set forth in WBI’s disclosure statement in Part 2A of Form ADV, a copy of which is available upon request.

You are not permitted to publish, transmit, or otherwise reproduce this information, in whole or in part, in any format to any third party without the express written consent of WBI Investments, Inc.

Unless otherwise noted, data provided is from Bloomberg as of 2/20/19.

Sector and Allocation holdings subject to change at any time and are not recommendations to buy or sell any security.


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Unless otherwise indicated all performance is sourced from Bloomberg.


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