S&P 500 Earnings Estimates

The first estimates of earnings during 2015 for the S&P 500 were released on Friday. Howard Silverblatt updates an amazing workbook every week, but what is really amazing is the optimism of Wall Street analysts. I intend to track the revision of 2015 estimates over the course of the next two years. We’ll see how well I do at achieving that goal.

Let’s start with a baseline. With 83.9% of the companies in the S&P 500 reporting, the total estimate for As Reported Earnings* for 2013 is currently $101.43. As we have reached the halfway point of the first quarter of 2014, there is beginning to be some changes in 2014 estimates. Still, the total estimate for 2014 As Reported Earnings is $120.50. That is a healthy gain of 19% over 2013 earnings.

With the first estimate of 2015 As Reported Earnings, Howard is reporting $147.50, a smart little 22% increase over 2014 estimates. By itself, that seems optimistic. Combine that with nominal wage gains from workers and that seems over-optimistic. If I have time tomorrow, I will write up how that affects the P/E ratio of the S&P 500. It is interesting.

* For those who don’t know, there are two types of earnings — Operating Earnings and As Reported Earnings. As Reported Earnings are GAAP based and what companies report on their taxes. They seem quite real. Operating Earnings are quite fanciful since they exclude one-time events (which seem to recur) and corporate financial activity which may not result in actual cash.


Author: dmcnic

Educated as an economist, I now work as an Analytical Professional for a manufacturing firm. I have have a second job as a part-time lecturer at the University of Washington in Bothell. While all baseball interests me, the Mariners are my home town team. Married with one dog.

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