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Leigh Drogen

About the Author Leigh Drogen

Leigh Drogen is the Founder and CEO of Estimize. Estimize is an open financial estimates platform which facilitates the aggregation of fundamental estimates from independent, buy-side, and sell-side analysts, along with those of industry experts, private investors and students. By sourcing estimates from a diverse community of individuals, Estimize provides both a more accurate and more representative view of expectations compared to sell side only data. Leigh started his career as a quant trader at Geller Capital, a White Plains, NY based fund where he ran strategies that looked at earnings acceleration and analyst estimate revision models, as well as price momentum and several sentiment indicators. Leigh later went on to be the founder of Surfview Capital, a New York based asset management firm that used many of the same strategies as Geller Capital, with a focus on higher beta names on an intermediate term time frame. His educational background includes focus in economics and international relations, specifically war theory. He is a graduate with honors from Hunter College in New York City. You can contact Leigh by emailing him at Leigh@estimize.com

S&P 500 Growth Gets A Boost From A Few Notable Earnings Reports


Great earnings results over the past couple of days has boosted S&P 500 blended growth up to 6.4% from 6.0% Tuesday. After the closing bell, Disney (NYSE:DIS) reported blowout earnings of $1.27, beating the Estimize consensus by $0.17 and the Wall Street consensus by $0.19. This is the most the company has surpassed the Street’s expectations in the last 15 years! Revenues were also a bright spot, coming in close to $500M above estimates. The company linked its success to record themepark visitations over the holidays, and is looking to have another blockbuster year in 2015, mostly due to studio entertainment which will be releasing 12 new films this year, despite the fact that this segment saw revenues dip 2% in Q4 due to difficult YoY comparisons.

Gilead Sciences (NASDAQ:GILD) was another big winner, posting Q4 EPS of $2.43 and surpassing both the Estimize and Wall Street consensus, posting YoY growth of 342%. Revenues also beat by a hefty $500M margin, and grew 134% YoY. Despite the beat, admission that the biotech company is offering steeper-than-expected discounts on its hepatitis C drugs to health insurers who had complained about the price, concessions that are necessary now that the company has competition with Abbvie in the hep C market. Better than expected Q4 numbers boost earnings growth for the S&P 500 biotech sector to 64% and revenues to 43%.

Wednesday morning we had a couple of promising reports from the consumer names. General Motors (NYSE:GM) posted EPS of $1.19, greatly exceeding expectations from both Estimize and the Street, and growing an incredible 78%. This is the biggest beat since the reorganized company IPO’d in 2010. Revs on the other hand didn’t fare so well, coming in below estimates and declining 2%. Whirlpool (NYSE:WHR) proved that some durable goods companies are doing just fine, reporting their largest EPS beat in 4 years due to successful acquisitions in Asia and Europe.

How are we doing?

Expectations for S&P 500 earnings growth for the fourth quarter stand at 6.4%. Revenues are anticipated to come in with 1.5% growth.

Leaders

Earnings:

Health Care (23.1%). Notable industry: Biotechnology (63.8%).

Information Technology (17.4%). Notable industry: Semiconductors (30.7%)

Revenues:

Health Care (9.4%). Notable industry: Biotech (42.7%).

Information Technology (8.6%). Notable industry: Tech Hardware, Storage & Peripherals (16.3%)

Laggards

Earnings:

Energy (-19.8%). Notable industry: Oil, Gas and Consumable Fuels (-22.3%)

Materials (-0.5%). Notable industry: Paper & Forest Products(-27.0%)

Financials (-1.2%). Notable industry: Banks (-4.8%)

Revenues:

Energy (-13.9%). Notable industry: Oil, Gas and Consumable Fuels (­-16.3%).

Materials (-2.7%). Notable industry: Paper & Forest Products (­-18.0%).

Beat/Miss/Match

Earnings: With 254 S&P 500 companies reporting thus far, 58% have beaten the Estimize consensus, 35% have missed and 7% have met. This is compared to Wall Street estimates, of which 72% of companies have beat on the bottom­-line, 18% have missed and 10% have met.

Revenue: 46% have beaten the Estimize consensus, while 54% have missed. For revenues, 55% of companies have beat the Wall Street estimate, while 45% have missed.