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Friday
Jul272012

Earnings and Revenue Beat Rates as Earnings Season Has Progressed

Nearly 1,000 companies have now reported their Q2 earnings and revenue numbers.  At the moment, 60.6% of the companies that have reported have beaten earnings per share estimates, while 47.9% have beaten top-line revenue estimates.  At 60.6%, the current EPS beat rate for this season is right inline with the average beat rate that we have seen since the start of 2011.  At 47.9%, the revenue beat rate is much lower than the average of 60% that we've seen start of 2011.

Below is a chart that shows how the overall earnings and revenue beat rates have changed as earnings season has progressed.  As shown, the earnings beat rate started out very low, but it ticked up above 60% on July 19th and has remained above 60% since then.  The revenue beat rate was down near 41% early on, but it has been ticking higher this week.  On Monday, the revenue beat rate for all companies that had reported was 43.9%, but through today, the beat rate has ticked up near 48%. 

We're just now halfway through the second quarter reporting period, and another 1,000+ companies still have to report.  If the revenue beat rate can continue to tick higher and get into the 50s, it will look much better than it did early on.  

Bespoke 50