• Sprott Money
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Earnings Update: Just Five (Plus One) Charts - A Complete Disaster

Tyler Durden's picture


So far, 91 companies have reported 1Q results (28% of total S&P 500 market capitalization). 37% of companies reporting have beaten earnings estimates (below the historical average of 47%) and 13% have missed estimates (vs. average of 15%). The average EPS surprise has been 3.4%, below the 4.8% historical average. Excluding Financials, there are similar positive surprises (37%) and similar negative surprises (13%). Excluding Financials and Utilities, 21% of companies reporting have beaten sales estimates (below the historical average of 38%) and 24% have missed estimates (vs. average of 18%). The average revenue surprise has been -0.1%, below the 1.3% historical average. In short, things are not going according to plan - though we assume this just means the Q4-fantasy-hockey-stick explosion of revenues, earnings, and margins will just get bigger.

So where do we see Green Shoots?

Earnings Beats... nope...


Revenue Beats... nope...


Revenue Misses... nope...


Average EPS Surprise (%)... nope...


Average Revenue Surprise (%)... nope...

(averages based on last 40 quarters)

Seems to us like 5-out-of-5 is not good...

And some more from Goldman:

After the first major week of the 1Q earnings season, 104 firms in the S&P 500 have now reported results (33% of market cap). Three takeaways so far: (1) Financials beat earnings estimates, but investors were disappointed with the quality of those beats (2) Half of firms have reported earnings results in-line with consensus expectations (3) After improvement last quarter, revenue results are disappointing again. Next week is the biggest reporting week of the 1Q 2013 season. 169 firms representing 34% of S&P 500 market cap will report results including XOM and AAPL.

  • Financial results disappoint despite beating earnings estimates

    Only one-third of Financials companies that beat earnings expectations outperformed the S&P 500 on the next trading day compared with 76% of non-Financials firms. Underperformance reflects disappointment with the quality of earnings beats.
  • Half of earnings results in-line with consensus expectations

    36% of firms beat consensus earnings expectations by more than one standard deviation, below with the 10-year average of 47%. 13% of firms have missed earnings estimates by that magnitude, vs. 15% historically.

  • Almost one-third of firms missed revenue estimates

    Only 14% of firms beat consensus sales expectations by more than one standard deviation versus the 10-year historical average of 36%. This is similar to the 2Q and 3Q 2012 reporting seasons.

And the plus one chart: the only time EPS surprises were this bad in the past 40 quarters this many days into the earnings season? Last quarter's horrendous earnings season.

in short: a complete disaster.

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Fri, 04/19/2013 - 14:35 | 3473208 Edward Fiatski
Edward Fiatski's picture

Negative surprise - best surprise.

Fri, 04/19/2013 - 14:44 | 3473269 bdc63
bdc63's picture

Excuse me, but can somebody explain to me what this has to do with the Boston bombers?  We're not allowed to talk about ANYTHING else today, just the bombers.  Don't believe me?  Turn on CNBC.

Fri, 04/19/2013 - 14:47 | 3473290 smlbizman
smlbizman's picture

thats why i am still under my bed....

Fri, 04/19/2013 - 14:49 | 3473306 WayBehind
WayBehind's picture

The biggest bomb is yet to explode ... obviously I'm talking about economy and financial markets

Fri, 04/19/2013 - 15:05 | 3473392 James_Cole
James_Cole's picture

The earnings aren't as bad as they seemed they might be. Some potential bombs still to go (I'm looking at you NFLX).

Fri, 04/19/2013 - 15:18 | 3473448 kliguy38
kliguy38's picture

Can I buy AAPL now

Fri, 04/19/2013 - 17:17 | 3474150 Alpha Monkey
Alpha Monkey's picture

I recomend the 3x leveraged Apple bull ETF.

Fri, 04/19/2013 - 16:27 | 3473902 e-recep
e-recep's picture

wise footnote. you cant be too careful these days.

Fri, 04/19/2013 - 14:48 | 3473294 Bearwagon
Bearwagon's picture

Buy! Consume! Stay asleep!

Fri, 04/19/2013 - 15:00 | 3473364 I Am Not a Copp...
I Am Not a Copper Top's picture

Marry and reproduce!

Fri, 04/19/2013 - 15:36 | 3473558 Col_Sanders
Col_Sanders's picture

This is your god!

Fri, 04/19/2013 - 14:40 | 3473211 UH-60 Driver
UH-60 Driver's picture

The charts are too complicated.  Sheep are color blind.


ETA:  Sheep are not color blind, but they will react with fear to new colors.  I suggest the use of 'red blood" next time.

Fri, 04/19/2013 - 15:10 | 3473410 max2205
max2205's picture

Estimates are the ultimate ponzi

Fri, 04/19/2013 - 14:37 | 3473214 Dr. Engali
Dr. Engali's picture

Clearly the "analysts" need to do a better job at lowering the bar....there's alway next quarter.

Fri, 04/19/2013 - 14:40 | 3473252 Bearwagon
Bearwagon's picture

If these idiots can't even handle statistics anymore, there's not much hope anyways ...

Fri, 04/19/2013 - 14:38 | 3473220 LibertarianTree
LibertarianTree's picture

So what you are saying is that this quarter has been a little below average? Call Bernanke its time to buy some more printing machines to boost the market!

Fri, 04/19/2013 - 14:37 | 3473222 timbo_em
timbo_em's picture

Time to seasonally adjust balance sheets and p&l accounts otherwise gravity might come into play.

Fri, 04/19/2013 - 14:37 | 3473223 fonzannoon
fonzannoon's picture

Can we clearly state now that earnings don't matter? Buy the index and don't worry that each company inside it is imploding...yet the index goes up?

Fri, 04/19/2013 - 14:49 | 3473302 kito
kito's picture

hey fonz, didnt we bet a turkey sandwich about this on yesterdays post??? i said dow would be green??????

Fri, 04/19/2013 - 15:01 | 3473353 fonzannoon
fonzannoon's picture

don"t go after the turkey sandwich, i agreed right away i would be dead wrong

Fri, 04/19/2013 - 17:15 | 3474144 Alpha Monkey
Alpha Monkey's picture

It's cool, they can just swap losers with winners and keep on truckin.

Fri, 04/19/2013 - 14:43 | 3473265 the not so migh...
the not so mighty maximiza's picture

cooking the books and it stll sucks.

Fri, 04/19/2013 - 14:43 | 3473267 rubearish10
rubearish10's picture

Well, these are terriffic charts but today we have GOOG and USDJPY, so why worry. Tomorrow's another day.

In the meantime, terrorists are winning!

Fri, 04/19/2013 - 14:47 | 3473285 Handful of Dust
Handful of Dust's picture

I always like we they get to the, "In short..." part.

Fri, 04/19/2013 - 14:47 | 3473289 venturen
venturen's picture

Someone get me a blue pill!

Fri, 04/19/2013 - 14:51 | 3473319 Bearwagon
Bearwagon's picture

Turn on your TV and set the dial to 11

Fri, 04/19/2013 - 19:48 | 3474817 mt paul
mt paul's picture

will trade 2 blue pills

for 1 oz gold..

Fri, 04/19/2013 - 14:49 | 3473293 kito
kito's picture

dow about to turn pretty!!!!!...................

Fri, 04/19/2013 - 14:52 | 3473322 Bearwagon
Bearwagon's picture


Fri, 04/19/2013 - 14:50 | 3473307 WTF_247
WTF_247's picture

Until the fund managers start to worry that the Fed really does not have their backs then none of this matters.  They have not reacted to repeated lowering of GDP or earnings estimates so why would they care about results?  Lower earnings estimates - stocks go higher.  Stock beats lowered estimates - stock goes higher.  Stock misses earnings - a few weeks later stock is higher.

Slam IBM down huge but use that money to buy other stocks.  Most names have very little resistance to moving up.  The smallest push in the futures gets them going.

Fri, 04/19/2013 - 14:54 | 3473328 buzzsaw99
buzzsaw99's picture

:sigh: someone lower the bar, again, :sigh:

Fri, 04/19/2013 - 15:01 | 3473351 Bearwagon
Bearwagon's picture

Take two Aspirin and lay down on your bed for a while. If that doesn't help, take a bottle of booze and lay down on your couch 'til tomorrow.

Fri, 04/19/2013 - 14:54 | 3473329 PUD
PUD's picture


Fri, 04/19/2013 - 14:58 | 3473340 augustusgloop
augustusgloop's picture

whipsaw currencies, smash gold, prop indices, HOPE for the best

Fri, 04/19/2013 - 14:58 | 3473341 B2u
B2u's picture

Isn't this a good time to buy stocks and apply for food stamps?

Fri, 04/19/2013 - 15:01 | 3473362 yogibear
yogibear's picture

What's wrong with these few analyst?

The game is to always lower estimates so they can beat them ?

It's always perception for the sheeple.

Fri, 04/19/2013 - 15:00 | 3473363 shermacman
shermacman's picture

Plenty of room on the upside then, bulllish for Dow!

Fri, 04/19/2013 - 15:11 | 3473426 broken87
broken87's picture

I lik Pr0n

Fri, 04/19/2013 - 15:30 | 3473512 Non Passaran
Non Passaran's picture

i likE pr0n

Fri, 04/19/2013 - 15:11 | 3473429 The big unzip
The big unzip's picture

When do they start throwing money
from helicopters? That's what I'm waiting on!

Fri, 04/19/2013 - 15:41 | 3473593 css1971
css1971's picture

If they had done that 5 years ago instead of giving credit to financial institutions this would have been solved by now.

Fri, 04/19/2013 - 15:41 | 3473588 Haager
Haager's picture

If just intraday is focusssed some should wonder why the stocks are greenish. Oil reasonable low on the day, silver and gold not soaring but bonds still in the highs. It's not bullish to me.

Fri, 04/19/2013 - 15:47 | 3473624 1000 splendid suns
1000 splendid suns's picture

Moar green toilet paper!

Fri, 04/19/2013 - 15:56 | 3473682 natronic
natronic's picture

Stock market will reach new highs after hearing this news.  Some people denegrate us for not talking about fundamentals or other high falutin chatter.  Well right now there really isn't anything to analyze so

Fri, 04/19/2013 - 16:29 | 3473921 natronic
Fri, 04/19/2013 - 17:11 | 3474127 Alpha Monkey
Alpha Monkey's picture

Keep on suckin up the MSM noise on bitcoins.  Guy is $10K up, yet title of article is how he "lost $50K", which he didn't... he just didn't cash out when he was up $60K on his $4K investment.

Fri, 04/19/2013 - 17:45 | 3474256 neutrinoman
neutrinoman's picture

And the expectations themselves are a phony game. The right comparison is actual earnings now versus a year ago -- no expectations, no seasonal corrections, or any of that crap.

Fri, 04/19/2013 - 19:14 | 3474649 CHX
CHX's picture

Ain't that bullish now?

Fri, 04/19/2013 - 21:20 | 3475305 knowshitsurelock
knowshitsurelock's picture

So can we now BTFD?  Onward and upward for the market!  Who cares about lowered expectations from a bunch of ANAL-ists on Wall Street when we have a robust casino of stocks to chase into the blue sky cheap seats!

Just BTFD.

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