Here Are The 4 Main Themes From Q3 Earnings Calls

Now that Q3 earnings season is in the history books (in fact there is just a little over a month until the Q4 earnings season begins), we can do a quick post-mortem: contrary to expectations, 3Q 2023 results were better than feared, and indeed, the earnings recession is now officially over. As of November 17th, 470 companies have reported 3Q results, representing 92% of total S&P 500 market cap. Of these companies, 59% beat earnings by at least 1 standard deviation of analyst estimates (vs. 15 year average of 48%) and 7% of companies missed earnings by at least 1 standard deviation of analyst estimates (vs. 15 year average of 13%). Consensus expected no EPS growth at the start of 3Q reporting season. With reporting season almost complete, expected EPS growth year/year is now 4%, primarily reflecting better than feared margins

While it was already common knowledge that Q3 earnings was materially stronger than expected, Goldman's chief US equity strategist David Kostin has compiled his quarterly S&P 500 Beige Book which reviews conference call transcripts "to gain a qualitative perspective on key issues facing company managements." This quarter, he highlights the four key themes from 3Q earnings calls: (1) Interest expense; (2) paying down debt; (3) consumer spending; and (4) AI.