Q4 2017 corporate earnings continued to grow, with S&P 500 sales up 7.67% and earnings up 14.28%, the highest revenue growth since 2011. Over 70% of S&P 500 companies reported earnings above estimates. Global earnings growth is expected to continue, supported by tax reform and revisions by companies. Revisions to 2018 earnings guidance have been increasing globally and especially in Europe.

1. Market Perspective – March 2018
Experience Insight Impact
Overview: With fourth quarter (Q4 2017) earnings season largely complete, it appears the S&P
500’s sales and earnings growth trends are continuing upward. Global corporate growth
expectations are improving as well. This month, we revisit corporate earnings and peer into
future expectations.
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2. Corporate Earnings Rebound Continues
Experience Insight Impact
• Year-over-year,
Q4 S&P 500
sales grew
7.67%, while
earnings grew
14.28%.
• This is the
highest revenue
growth since
Q3 2011. All 11
sectors
reported year-
over-year
growth in sales.
Source: Bloomberg
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3. Earnings Were Generally Better Than Expected
Experience Insight Impact
To date, 99% of the companies in the S&P 500 have reported earnings for Q4 2017. Of these
companies, 73% reported actual Earnings Per Share (EPS) above the mean EPS estimate, which was
above the five-year average of 69%. In aggregate, earnings exceeded expectations by 4.4%, which was
slightly above the five-year average of 4.3%. Due to these upside surprises, the S&P earnings growth
rate has improved to 14.3% from 11.0% on December 31st.
Source: FactSet
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4. Earnings Growth Expected to Continue
Experience Insight Impact
Notwithstanding likely future revisions, earnings growth is expected to continue. Policy tailwinds (e.g.
tax reform) are adding to the growth.
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Source: FactSet

5. Global EPS Revisions Spiking
Experience Insight Impact
On the back of better Q4 earnings, global companies (as measured by the MSCI All-
Country All World Index) are revising their 2018 earnings guidance higher.
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Source: Bloomberg

6. International EPS Revisions Better Than Global Average
Experience Insight Impact
Europe’s earnings revisions (i.e. when companies increase their EPS guidance) has
been trending better than the global average.
Source: Bloomberg
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7. Market Perspective – March 2018
Experience Insight Impact
Conclusion: With strong earnings trends as a backdrop, global markets continue to advance even
with the return of more normalized market volatility. While we are continuously monitoring
economic trends, it appears 2017 was a strong year for earnings growth and early 2018 is
showing a continuation of this trend.
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8. Disclaimer
Experience Insight Impact
Opinions expressed in this commentary may change as conditions warrant and is for informational
purposes only. Information contained herein is not intended to be personal investment advice for
any specific person for any particular purpose. We utilize information sources that we believe to
be reliable but cannot guarantee the accuracy of those sources. Past performance is no guarantee
of future performance; investing involves risk and may result in loss of capital. Consider seeking
advice from a professional before implementing any investing strategy.
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