How have earnings for Q1 done so far? Let's ask FactSet.

Here is Factset's update today about earnings so far. They regularly report on what proportion of companies missed earnings and by how much. I'll summarize some of the snippets.

Overall, 18% of the companies in the S&P 500 have reported actual results for Q1 2023 to date. Of these companies, 76% have reported actual EPS above estimates, which is below the 5-year average of 77% but above the 10-year average of 73%. In aggregate, companies are reporting earnings that are 5.8% above estimates, which is below the 5-year average of 8.4% and below the 10-year average of 6.4%.

[18% of 500 is 90 companies, and "during the upcoming week, 180 S&P 500 companies (including 14 Dow 30 components) are scheduled to report results for the first quarter."]

So most companies are beating estimates, however note that this is normal as analysts typically are more pessimistic about the immediate quarter than the actual results. And slightly fewer are beating than normal, but really an inconsequential difference given how few have reported so far--we're talking 1-3 companies out of 90. And the magnitude of the beats are slightly lower than usual. Visually, you can see Financials/Tech/Real Estate missed expectations most frequently (ignoring magnitudes). They state that healthcare saw the biggest magnitude of earnings surprises.

They anticipate 6.2% year over year decline in earnings.

On revenue:

In terms of revenues, 63% of S&P 500 companies have reported actual revenues above estimates, which is below the 5-year average of 69% but equal to the 10-year average of 63%. In aggregate, companies are reporting revenues that are 1.8% above the estimates, which is below the 5-year average of 2.0% but above the 10-year average of 1.3%.

The sector breakdown was more evenly spread for revenue misses. You can see materials/comm. services/IT particularly hard hit.

They also gave this comparison of year over year EPS declines for today vs March 31st, but I do not understand fully how to interpret this number. [Can someone chip in here? You would need to read their main article where they discuss it.]

Finally as for the rest of 2023 and the valuations:

Looking ahead, analysts still expect earnings growth for the second half of 2023. For Q2 2023, analysts are projecting an earnings decline of -5.0%. For Q3 2023 and Q4 2023, analysts are projecting earnings growth of 1.6% and 8.5%, respectively. For all of CY 2023, analysts predict earnings growth of 0.8%.

The forward 12-month P/E ratio is 18.2, which is below the 5-year average (18.5) but above the 10-year average (17.3). It is also slightly above the forward P/E ratio of 18.1 recorded at the end of the first quarter (March 31).