Energy Sector Earnings Have Been Surprisingly Good So Far

From Steven Vannelli, CFA: So far in this earnings season, with over half of companies having reported, the energy sector has experienced the biggest earnings surprise. Earnings have come in almost 23% ahead of analyst estimates, nearly double the surprise of the consumer discretionary sector.

Digging into industry groups, with 6 out of 7 companies in the S&P 500 having reported so far, the Energy Equipment and Services industry has experienced an almost 40% earnings surprise factor.

In reviewing the components of the industry, 5 out 6 companies reported earnings surprises, with Baker Hughes trouncing estimates by 81%.

Among constituents of the Oil, Gas and Consumable Fuels industry, 9 out of 10 companies reported positive earnings surprises.

Chevron was a particularly high profile earnings beat. Cash flow after dividends is back in the black, rising to $900M.

Compared to a year ago, where the company lost $725M, first quarter earnings were $2.682B.

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The Energy Select Sector SPDR ETF (NYSE:XLE) closed at $67.84 on Friday, up $0.05 (+0.07%). Year-to-date, XLE has declined -9.93%, versus a 6.51% rise in the benchmark S&P 500 index during the same period.

XLE currently has an ETF Daily News SMART Grade of C (Neutral), and is ranked #15 of 38 ETFs in the Energy Equities ETFs category.


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