For Immediate Release Chicago, IL – April 15, 2016 – Zacks Director of Research Sheraz Mian says, "Relative to the low levels to which estimates had fallen ahead of the start of this earnings cycle, the actual reports are turning out to be less bad." Early Read on the Q1 Earnings Season The following is an excerpt from this week's Earnings Trends piece, to access the full article, please click here. It is perhaps way too early to draw any meaningful conclusions from the Q1 reports thus far. But relative to the low levels to which estimates had fallen ahead of the start of this earnings cycle, the actual reports are turning out to be less bad. It appears that the accelerated drop in earnings estimates over the last few months had conditioned market participants for a very weak showing this reporting cycle. And the actual results at this admittedly early stage are turning out to be simply ‘weak,’ not ‘very weak.’ This view explains the market’s favorable reaction to the otherwise underwhelming reports fromJ.P. Morgan (JPM), Alcoa (AA), CSX Corp. ( CSX) and others. Including this morning’s reports, we now have Q1 results from 32 S&P 500 members. Total earnings for these 32 index members are down -6.8% from the same period last year on +0.9% higher revenues, with 71.9% beating EPS estimates and 53.1% coming ahead of top-line expectations. This is weaker earnings and revenue growth from these 32 index members than we have seen these same companies come out with in other recent reporting cycles. But we knew that already – no one expected growth to be anything but problematic in Q1; earnings growth was expected to be in the negative for the 4th quarter in a row. That said, positive surprises are relatively more numerous, though that could very well be either a function of depressed estimates or a small and unrepresentative sample size at this stage. The reporting cycle ramps up materially in the coming days, with a 100 S&P 500 index members reporting results next week, as you can see in the chart below of weekly schedule of Q1 results. For the 2016 Q1 earnings season as a whole, here are the 3 key points to keep in mind. First , Q1 estimates followed the by-now familiar pattern of coming down as the quarter unfolded. Total S&P 500 earnings for the quarter are expected to be down -10.3% from the same period last year on -0.6% lower revenues, a sharp drop from what was expected at the start of the period. Second , not only is the magnitude of negative revisions that Q1 estimates suffered the largest compared to other recent quarters, but they are also broad-based and not just a function of Energy sector issues. The Energy sector’s estimates have unsurprisingly suffered the most, but the reality is that estimates for 14 of the 16 Zacks sectors have come down since the start of the period. The chart below reproduces the above revisions chart that shows the index’s Q1 earnings growth with and without the Energy sector. Third , the growth challenge is expected to continue into the following quarter as well, with total 2016 Q2 earnings for the S&P 500 index also currently expected to be in the negative. We know on past history that Q2 estimates will be coming down as companies report Q1 results share their outlook with analysts. All of this year’s growth is dependent on estimates for the back-half of the year. Part of the back-half improvement reflects an end to the Energy sector’s drag due to easier comparisons for that sector and consensus expectations of stabilization in oil prices going forward. But it’s not unusual for Wall Street analysts to be optimistic about the outer periods; they start out with a positive tone and start getting realistic only as the period gets nearer. If history is any guide, then we should see those back-half estimate start coming down in the coming months. To access the full Earnings Trends article, please click here. Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today. Find out What is happening in the stock market today on zacks.com. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report JPMORGAN CHASE (JPM): Free Stock Analysis Report ALCOA INC (AA): Free Stock Analysis Report CSX CORP (CSX): Free Stock Analysis Report To read this article on Zacks.com click here.