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Market Moves

S&P 500 Earnings Off 1% in Q3, Analysts Estimate

Marking a third straight period of losses, the index’s EPS suffered in financials, real estate, material, health care and energy, a survey finds.

By Larry Light




Third time’s a charm? Not so much for the just-completed quarter that ran from July through September: Analysts’ consensus is that the S&P 500’s earnings per share will be down 1% year over year, marking the third straight period of negative numbers, according to S&P Capital IQ.

The good news is that analysts estimate the index will not be in the red for the following three quarters. This year’s fourth quarter is estimated to show an 8.2% gain, followed by 0.0% in 2024’s first quarter and 11.9% in its second. The projection for all of 2023 is for a flat performance (meaning zero), with an 11.9% advance for 2024 as a whole.

The rosier forecast for next year assumes that there will be no recession and that interest rates, which ballooned in 2023, will no longer rise and may even fall to some degree.

The minus 1% projection for third-quarter 2023 EPS is an improvement on the second period’s 5.4% loss and the first quarter’s 1.2% drop. As of Monday, 116 S&P 500 companies have issued EPS guidance for the third quarter. Of these, 74 gave negative EPS guidance and 42 positive, per FactSet Research. The number of companies issuing negative EPS guidance for the third quarter is greater than the five-year average of 58 and the 10-year average of 63. Company results for the quarter are starting to trickle in and will grow in coming weeks.

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In Q3, five of the S&P 500’s 11 sectors were in negative territory: energy, financials, health care, materials and real estate. In addition to the large-cap S&P 500, the Standard & Poor’s indexes for mid caps and small caps are projected to be underwater for the quarter.

S&P 500 energy stocks for the third quarter are anticipated to plummet 38%. “Relative to the third quarter of 2022, spot prices for West Texas Intermediate (WTI) crude oil are estimated to be down 12%, and we forecast spot prices for Henry Hub natural gas to be down a whopping 68%,” wrote Sam Stovall, chief investment strategist at CFRA Research, in a report.

Oil and gas prices in 2022’s third quarter were higher due to Russia’s invasion of Ukraine, which led to many Western nations barring Russian energy imports, thus jacking up oil and gas prices. As a result, 2022’s third period was good for energy profits.

Stovall pointed to rising rates and a sliding stock market for the financial sector’s projected 0.3% slip in the third quarter. Health care’s 10.8% fall stems from a drop in sales of COVID-19-related products and patent expirations, while higher costs from inflationary pressures “could put pressure on margins,” in Stovall’s view. For materials, anticipated to decline 17.7%, Stovall placed the blame on falling commodity prices—thanks to a strong U.S. dollar—plus weaker consumer and industrial demand owing to lingering recession fears. The same economic uncertainty and higher rates harmed real estate (off 28.7%), he indicated.

That is why the expected brightening picture up ahead will be doubly welcome after a triple play of bad quarters.

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Home > News > Pensions > Cybersecurity Breaches at UK Pensions Soar More Than 4,000% in 1 Year
Pensions

Cybersecurity Breaches at UK Pensions Soar More Than 4,000% in 1 Year

The number of reported attacks on all British financial firms triple, with the pension sector seeing the biggest increase.

By Michael Katz




Cybersecurity breaches reported by British financial services companies more than tripled in the 12-month period ending June 30, with the pension sector reporting the biggest increase at 4,000%, according to research from international law firm Reynolds Porter Chamberlain.

Citing data from the British Information Commissioner’s Office, the law firm stated that U.K.-based financial companies reported 640 cybersecurity breaches between June 30, 2022, and June 30, 2023, up from 187 during the same period from 2021 to 2022. Among those, pension plans reported to the ICO a total of 246 cybersecurity breaches, up from just six during the previous 12-month period.

According to RPC, hackers go after pension plans because they hold an enormous amount of valuable, sensitive financial data, which makes them potentially vulnerable to ransom demands. The firm added that pension plans—trustees in particular—can be held liable for a failure to manage digital risk appropriately, noting that The Pensions Regulator holds trustees accountable for the security of a plan’s information and assets—even if they are outsourced.

“Cybersecurity is fundamental to pension scheme trustees’ legal duties,” Richard Breavington, partner and head of cyber and tech insurance at RPC, said in a release. “It’s a cause for concern that so many financial services firms, especially pension schemes, have suffered some form of cyber-attack, resulting in a data breach.”

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Breavington added that “the assumption might sometimes be that major financial services businesses have robust cyber defenses so that they are impervious—that certainly hasn’t stopped hackers continuing to try.”

According to the U.K.’s Department for Science, Innovation and Technology, because the most common cybersecurity threats are relatively unsophisticated, government guidance advises businesses and charities to protect themselves using what it calls “cyber hygiene” measures. This includes a broad range of measures, the most common of which are updated malware protection, cloud back-ups, passwords, restricted administrative rights and network firewalls.

 

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