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Sunday
May012011

Earnings and Revenue Beat Rates

At the start of last week, only 322 US companies had reported their quarterly numbers for the first quarter earnings season.  By the end of the week, 1,052 companies had reported.  As shown below, the percentage of US companies that have beaten earnings estimates this season now stands at 64%.  If we narrow the list down to just S&P 500 names, the beat rate jumps up to 73.6%, which means large companies are reporting better numbers versus expectations than their smaller cap brethren.

At 64% for all US companies, the earnings beat rate for the current earnings season is lower than it has been in 7 quarters.  We'll see where things stand once the season wraps up in mid-May, however.

While the earnings beat rate is a bit weak this season, the percentage of companies beating revenue estimates currently stands at 72%, which would be the highest reading since 2004 if the reporting period were to end today. 

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Reader Comments (1)

Not a surprise-weak dollar + a greater percentage of business done in non-US dollar environments versus all prior history, plus greater inflation generally in the US over the past two quarters, equals reported revenue spurt.
The 'beating estimates' tango is a scam perpetrated by the high level bureaucrats running the large transnational corprocracies, the stooge
analysts of the 'sell'(anything that can be sold) side and the high turnover funds that are the biggest trading partners of the stooges' employers.
It would be great if we could get real analysis of corporate financial results, that focused on how a firm was performing in 1) an absolute sense 2)versus prior periods(not just the single prior year) of the same season 3) in terms of real and consistent(i.e., GAAP compliant-which isn't exceptionally conservative accounting practice)reporting standards 4) and net of currency and/or price inflation impacts.
But that's not in the interests of any of the playah's, including the regulators who should be demanding and enforcing the above.

May 3, 2011 | Unregistered CommenterRantly McTirade

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