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What Are Q4 Earnings Saying So Far?

With so much to talk about — and so much of it earnings-related — I thought it prudent to simply list a series of companies that have reported Q4 earnings before the bell on Friday, then give a general overview. But first, Q4 gross domestic product (GDP) numbers have just been released.

stocks earnings reportsQ4 GDP reached 2.6%, lower than the range of 2.8% – 3.2% expected. Strong consumer spending was higher than expected, indicating that inventory growth may have weighed on this first read for Q4 GDP.

Basically, count anything close to 3% as relatively in-line for now, especially considering the two revisions to come in the following months. The 2.6% GDP is definitely noteworthy compared to the final Q3 read of 5%, but the pricing index for Q4 remained unchanged.

ManpowerGroup Inc. (NYSE:MAN) beats forecasts on higher Q4 numbers than expected, indicating strength in the jobs market we saw in yesterday’s Initial Jobless Claims that were far below estimates. Manpower said growth in Europe was sluggish, but MAN stock managed to meet estimates on the top line.

Tyson Foods, Inc. (NYSE:TSN) beat expectations before the bell Friday and kept its forecast for full-year 2015 intact.

Beazer Homes USA, Inc. (NYSE:BZH) missed estimates on a loss in the company’s fiscal Q1. However, Beazer Homes expects its 2016 projections to remain on course.

Eli Lilly and Co (NYSE:LLY) beat earnings estimates by a penny, lowered its its revenue forecast for fiscal 2015 but kept its earnings estimates unchanged.

AbbVie Inc (NYSE:ABBV) reported a loss but beat estimates.

Earnings results thus far offer a mixed comparison to what we have seen from the same group of companies in recent quarters. The earnings growth rate is higher than what we saw from these companies in Q3 but below the Q4 average growth rate, with the revenue growth rate the other way around.

With respect to surprises, the earnings beat ratios are in-line with the preceding quarter, but tracking above the Q4 average. Revenue beat ratios are on the weak side.

Apple Inc.’s (NASDAQ:AAPL) record quarter has an outsized impact on the aggregate picture at this stage, with the earnings and revenue growth rates no longer comparing favorably to other recent quarters.

The Apple effect is particularly notable for the technology sector, where total earnings are currently up on higher revenues — a better performance than we have seen from this group of companies in a number of quarters.

But the picture isn’t that strong once Apple is excluded from the mix — the Q4 growth rates outside of Apple are actually lower compared to other recent quarters.

Estimates for the current and following quarter have started coming down in a big way, with the energy sector again playing a leading role as it did in the run up to the start of the Q4 earnings season.

Total earnings for the S&P 500 companies in Q1 are now expected to be down 0.5% from the same period last year, a big drop from the 10.8% growth that was expected in early October.

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