Blog — 1 Jun, 2023
S&P 500 Q1 2023 Sector Earnings & Revenue Data
By Nicholas Ephraim
EPS Beats and Misses %
In Q1 2023, 77% of S&P 500 constituents surpassed EPS expectations vs. S&P Capital IQ Estimates, a 9% increase compared to Q4 2022 (68%), and 7% above Q3 2022 (70%). Consumer Staples led the individual sectors with 90% of constituents outperforming EPS estimates, followed closely by Energy with 87%, and Materials with 86%. Energy rebounded quite a bit from Q4 2022 where only 64% of firms surpassed EPS estimates, and slightly above Q3 2022 (85%). It was also a strong showing from Information Technology and Industrials, both of which had 84% of firms beating analyst estimates. The lowest performing sectors of the quarter were Utilities with only 60% of constituents surpassing EPS estimates, Communication Services with 62% and Real Estate with 66%.
EPS Growth %
Year-over-year, the S&P 500 index recorded an EPS growth rate of 3%, an improvement compared to Q4 2022 (0.8%), but still 6% below Q3 2022. This quarter we observed negative earnings growth from five of the eleven sectors, including Real Estate (-13%), Communication Services (-10%), Health Care (-10%), Utilities (-6%) and Materials (-1%). Displacing Energy, which was the top performing sector three quarters in a row, was Consumer Discretionary with a 22% EPS growth rate, led by strong earnings from Booking Holdings Inc. (NASDAQGS:BKNG) and Chipotle Mexican Grill, Inc. (NYSE:CMG). Energy followed Consumer Discretionary with a 17% EPS growth rate, though that growth has slowed quite a bit compared to 136% in Q3 2022. Industrials also recorded a 17% growth rate, down 2% from Q4 2022. Financials, Consumer Staples, and Information Technology also recorded positive growth rates with 6%, 1%, and 1%, respectively.
Revenue Beats and Misses %
74% of firms in the S&P 500 outperformed S&P Capital IQ Estimates for revenue in Q1, rising 8% compared to Q4 2022 (66%), and 3% above Q3 2022 (71%). Consumer Discretionary led the individual sectors with 85% of firms surpassing revenue estimates, which is interesting given only a few quarters ago in Q2 2022 they were one of the lowest performing with 56%. Closely following Consumer Discretionary was Industrials with 82%, Information Technology with 81%, and Consumer Staples and Utilities with 80%. The lowest performing sector of the quarter was Materials with only 48% of firms surpassing revenue estimates, although this was an improvement from Q4 2022 where it was only 35%. The next lowest sector after Materials was Communication Services at 57%, followed by Energy with 61%.
YoY Revenue Growth %
Overall, Q1 2023 revenue for the S&P 500 recorded a growth rate of 4%, year-over-year, a slight increase from 3% in Q4 2022, but down 8% compared to Q3 2022. Utilities was the highest revenue growth sector of the quarter with 24%, interesting given year-over-year EPS growth was -6% for this quarter. Following Utilities was Financials with 18%, and Real Estate with 10%. Energy had the largest decline, going from a 52% revenue growth rate in Q4 2022 to -5% growth in Q1 2023. Energy ranked second lowest out of the individual sectors, just barely edging out Materials which recorded a -6% revenue growth rate. The other sectors all recorded growth rates in the single digits.
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