S&P 500 Q1 Earnings Down 25.9%; Financials Again Posts Negative Earnings

NEW YORK (Map) - NEW YORK, May 16 /PRNewswire/ -- According to preliminary figures released today by Standard & Poor's Index Services, first quarter 2008 operating earnings for the S&P 500 declined 25.9% over the first quarter of 2007, marking the third consecutive quarter the index has reported declining earnings -- an event not seen since the fourth quarter of 2001.

With 95% of the data in, first quarter operating earnings for the S&P 500 are preliminarily set at $16.59 per share, compared to $22.39 for the first- quarter of 2007. For the third consecutive quarter, S&P 500 As Reported earnings also posted a decline, falling 27.1% to $15.56 per share from the $21.33 per share posted in Q1 2007.

"The shift in earnings continues, with Energy contributing 23.2% of S&P 500 operating earnings during the first quarter, up from 13.6% a year ago," says Howard Silverblatt, Senior Index Analyst at Standard & Poor's. "Conversely, Financials have now become a negative contributor after accounting for 29.7% of operating earnings this time last year."

In terms of aggregate dollars, operating earnings for the first quarter were set at $144.4 billion (versus $200.2 billion for Q1 2007) and As Reported earnings were set at $135.4 billion (versus $190.7 billion in Q1 2007).

Standard & Poor's also notes that, when excluding the 92 Financial issues that make up 16.7% of the S&P 500, the remaining issues show an 8.8% weighted gain. Similar results were seen during the fourth quarter of 2007 when the index recorded a 30.8% decline; however, when excluding Financials, the index showed a weighted earnings gain of 12.2%.

"While the negative news surrounding Financials received all of the headlines during the first quarter, 53% of the non-Financial issues within the S&P 500 recorded double-digit earnings gains. Those same issues have posted an average price gain of 11.8% since the end of the first quarter," notes Silverblatt.

According to Silverblatt, the second quarter 2007 marked the highest level of index earnings in the index's history which sets the stage for an extremely difficult comparison for the upcoming quarter.

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    S&P 500
                         OPERATING    Y-OVER-Y      AS REPORTED    Y-OVER-Y
                          EARNINGS     CHANGE         EARNINGS      CHANGE
    QUARTER               PER SHARE                   PER SHARE
    03/31/2008 (95%)       $16.59      -25.90%         $15.56       -27.05%
    12/31/2007             $15.22      -30.79%          $7.82       -61.36%
    09/30/2007             $20.87       -9.38%         $15.15       -29.44%
    06/30/2007             $24.06        9.61%         $21.88         8.81%
    03/31/2007             $22.39        7.90%         $21.33         8.33%
    12/31/2006             $21.99        8.92%         $20.24        16.99%
    09/30/2006             $23.03       22.24%         $21.47        23.46%
    06/30/2006             $21.95       13.03%         $20.11         9.95%
    03/31/2006             $20.75       15.28%         $19.69        16.17%
    12/31/2005             $20.19       12.48%         $17.30        24.10%
    09/30/2005             $18.84       11.61%         $17.39        22.64%
    06/30/2005             $19.42       14.37%         $18.29        19.93%
    03/31/2005             $18.00       13.42%         $16.95        11.66%
    S&P 500 OPERATING EARNINGS CONTRIBUTION
                                   Q1 2008  Q4 2007  Q3 2007  Q2 2007  Q1 2007
    Consumer Discretionary          7.30%   11.10%    6.16%    7.95%    7.25%
    Consumer Staples               12.23%   13.61%    9.93%    8.19%    7.64%
    Energy                         23.15%   25.97%   16.17%   16.36%   13.64%
    Financials                     -3.26%  -17.58%   18.49%   28.41%   29.65%
    Health Care                    16.08%   15.45%   12.45%   10.28%   11.66%
    Industrials                    14.68%   18.18%   12.19%   10.68%   10.19%
    Information Technology         15.92%   20.82%   12.47%    9.31%   10.62%
    Materials                       5.10%    4.08%    3.53%    3.54%    3.51%
    Telecommunication Services      4.03%    4.59%    3.38%    2.74%    2.58%
    Utilities                       4.77%    3.79%    5.24%    2.55%    3.25%
    S&P 500                       100.00%  100.00%  100.00%  100.00%  100.00%
    S&P 500 Qtly EPS Change       -25.89%  -30.79%   -9.37%    9.59%    7.91%
         Ex/Financials              8.77%   12.23%   -0.06%    8.02%    6.72%
    S&P 500 OPERATING EARNINGS CHANGES
                                    Q1 2008   Q4 2007  Q3 2007 Q2 2007 Q1 2007
                                     OVER      OVER     OVER    OVER    OVER
                                    Q1 2007   Q4 2006  Q3 2006 Q2 2006 Q1 2006
    S&P 500                        -25.89%   -30.77%   -9.37%   9.59%   7.91%
    Consumer Discretionary         -21.13%   -10.74%  -39.85%  -1.77%  -6.77%
    Consumer Staples                17.76%    12.73%   13.04%   7.92%   6.02%
    Energy                          23.83%    25.50%   -9.02%   8.70%   1.70%
    Financials                    -107.87%  -142.74%  -37.46%  12.99%  10.86%
    Health Care                      2.68%    14.53%   14.59%  21.69%  13.25%
    Industrials                      7.18%    11.78%   12.19%   9.28%  14.34%
    Information Technology          11.73%    27.02%   13.98%   5.16%  10.75%
    Materials                        6.46%   -12.31%    5.69%   8.85%  16.74%
    Telecommunication Services      17.39%     8.81%    4.09%   2.93%  -1.13%
    Utilities                       14.92%    -0.87%    3.40%  -2.01%   3.66%

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