More gray seen in last half of 3rd-quarter earnings

NEW YORK, Oct 30 (Reuters) - The best of the U.S. third-quarter earnings season may already be over.

With results in from more than half of the Standard & Poor's 500 .SPX companies so far, some 85 percent of companies have beaten or matched analysts' expectations, according to StarMine, which tracks earnings data.

But with the largest contributors to the earnings beats in dollar terms -- diversified financials and banks, followed by materials and chip makers -- among those that have already reported, the remaining companies could have much less influence on the major stock indexes.

U.S. stocks have already begun to lose ground since the start of the earnings season.

The S&P 500 index gained 4.8 percent from Oct. 1 through the end of last week, but lost most of those gains this week, partly as investors booked profits from the recent rally. The S&P 500 is still up about 53 percent from its 12-year closing low in early March.

Among companies that have reported unexpectedly strong results this quarter: iPhone maker Apple Inc (AAPL.O: 株価, 企業情報, レポート) and blue-chip banking company JPMorgan Chase & Co (JPM.N: 株価, 企業情報, レポート), as well as chip maker Intel Corp (INTC.O: 株価, 企業情報, レポート) and aluminum company Alcoa Inc (AA.N: 株価, 企業情報, レポート). Intel and Alcoa are also among the 30 stocks in the Dow.

Even if the remaining companies post substantial earnings beats, the impact will not be as great. The market cap of the S&P 500 companies yet to report is almost 40 percent lower than ones that have already reported for the third quarter, StarMine's data showed.

'QUALITY SCORE' SLIPS

Next week's earnings agenda includes results from Cisco Systems (CSCO.O: 株価, 企業情報, レポート), Kraft Foods (KFT.N: 株価, 企業情報, レポート), Baker Hughes (BHI.N: 株価, 企業情報, レポート), MasterCard (MA.N: 株価, 企業情報, レポート), Starbucks (SBUX.O: 株価, 企業情報, レポート) and Qualcomm (QCOM.O: 株価, 企業情報, レポート).

Among diversified financials, 81 percent have reported results, while 100 percent of banks have released earnings; quarterly scorecards have come in from 77 percent of materials companies and 67 percent of chip makers.

The quality of earnings of companies yet to report is considered below those that have already reported, according to StarMine data. StarMine's "earnings quality score" for S&P 500 companies that have yet to report is 54 of 100, compared with a score of 60 for those that have already released results for the third quarter.

The lower score results from lower asset quality and other items.

But sentiment about earnings remains high.

"Expectations still seem very low," indicating companies will continue to beat Wall Street's estimates, said Tim Ghriskey, chief investment officer at Solaris Asset Management in Bedford Hills, New York.

Earnings estimates have improved sharply since the start of the month.

Third-quarter earnings for S&P 500 companies now are expected to decline 17.5 percent from a year ago, Thomson Reuters data showed. Estimates at the start of the month were for a decline of 24.7 percent.

Revenue estimates, too, have improved. The latest Thomson Reuters estimate for S&P 500 companies is for a revenue decline of 9.9 percent from the year-ago period. At the start of the month, third-quarter revenue was expected to decline 11.5 percent. (Reporting by Mike Tarsala; Additional reporting and writing by Caroline Valetkevitch; Editing by Jan Paschal)