The Tech Sector's Strong Earnings Power

 | Apr 28, 2017 02:44AM ET

We will see if this week’s earnings reports from Apple (FB ) – Facebook reports Q1 results after the market’s close on Wednesday May 3rd. The company is expected to report $0.88 per share on $7.8 billion in revenues, up +54% on +45.9% higher revenues from the year-earlier period, respectively. The stock didn’t do much following the December-quarter results, but was down following the September quarter report even though it handily beat EPS and revenue estimates. Facebook has never missed revenue estimates, though it came short of EPS estimates in its first three quarterly releases as a public company and a few times after that, but has been beating estimates consistently since the September 2015 quarter. The stock’s performance has been very impressive lately; it is up +30.4% in the year-to-date period vs. +6.8% gain for the S&P 500 index. Given these strong gains in the run up to the release, the stock could be risk of losing ground if trends in monthly active users or monetization trajectory for Instagram turn out to be less than perfect.

Q1 Earnings Scorecard

As of Friday, April 28th, we have Q1 results from 288 S&P 500 members that combined account for 63.8% of the index’s total market capitalization. Total earnings for these companies are up +13.7% from the same period last year on +8.2% higher revenues, with 76.4% beating EPS estimates and 68.1% beating revenue estimates. The proportion of companies beating both EPS and revenue estimates is 55.2%.

The table provides the current earnings season scorecard, as of April 28th, 2017.