Roughly 1,000 companies have reported second quarter earnings so far this season, and while the earnings beat rate has been average relative to prior quarters, guidance has been negative to say the least. As shown below, the current spread between the percentage of companies raising guidance minus the percentage of companies lowering guidance is -6.38 percentage points. If earnings season were to end today, this would be the most negative guidance spread since Q4 2008 when it was nearly -14 percentage points.
We’ve now had four straight quarters where more companies have lowered guidance than raised. This streak has come after we went nine quarters with a positive spread. The only other period over the last 10+ years where the spread was negative for this many consecutive earnings seasons was from Q2 ’02 to Q2 ’03 (5 quarters in a row).
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