Q3 earnings season begins this week – here’s a quick overview of what you can expect from Savita Subramanian and the Bank of America Equity and Quant Strategy team:
Third quarter earnings season starts this week and consensus expects EPS of $29.03, implying earnings growth of 4% YoY, or 5% ex. Financials (the only sector with a forecast decline). Sales growth is forecast at 4% YoY, with only Energy slated to see a decline. Bottom-up EPS expectations have fallen by 4% since the start of July, a large downward revision relative to recent quarters. Commodity prices and FX were big contributors, while mortgage-related settlements contributed ~$0.50. Excluding settlements, estimates fell 2.7%, in-line with recent quarters. Our long-standing 3Q EPS forecast of $30.00 would represent a 3% beat vs. today’s expectations, a bit lower than the beats we have seen over the last few years.
3Q14 preview: Expect a beat despite the headwinds
Bank of America Merrill Lynch – October 6th 2014