The Energy Sector is a leader among the S&P 500

Why materials, profits and sales surprises on the Energy Led S&P 500 Index

(Continued from previous part)

An industry sales surprise

As of February 5, 2016, 315 companies from the S&P 500 index published their results for the fourth quarter of 2015. The sales surprise for these companies was -0.18%. The energy sector (XLE), which reported a negative earnings surprise, recorded a positive sales surprise of 3.51%.

Among the individual industries covered by the index, the energy sector recorded the largest sales surprise, which indicates that the sales of these companies were higher than estimated.

The Utilities (XLU) sector, which has the highest negative earnings readings, also has the highest negative sales surprise of -12.43%. The materials and industrial sectors saw sales surprises of -2.24% and -1.53%, respectively. Eighteen of 27 materials companies published their results. The value of -2.24% represents the average sales of all 18 companies in the materials industry.

In the industrial sector, 51 out of 65 companies declared their previous results, and -1.53% means the average sales of 51 companies in the industrial sector. The chart above shows the sales surprise of individual sectors included in the S&P 500 index.

Healthcare and IT recorded a positive sales surprise

The selling surprise for the healthcare sector (XLV) was 0.92% and the financial sector (XLF) was 0.24%. Johnson & Johnson (JNJ), Pfizer Inc. (PFE) and Merck & Co. (MRK) represent some of the large-cap stocks in the healthcare sector. These companies have weights of 11.45%, 7.46% and 5.61%, respectively, in the Health Care SPDR ETF (XLV).

The information technology sector recorded a positive sales surprise of 0.3%, while the telecommunications sector recorded -0.56%. Next, we’ll discuss the moving average and analyst estimates for large-cap stocks in the energy sector.

Go to the next part

Explore this series on Market Realist: