As we approach 'peak earnings reporting' in the next two weeks, a quick glance at the state of the 65 companies of the S&P 500 that have reported so far may be useful. In yet another miracle of modern-day accounting, and just when you thought there was no more fat to cut, staff to lay-off, or Capex to cut, 73% of companies reporting have surprised positively on EPS while 65% have surprised negatively on Revenues. Industrials stand out in the liberal sprinkling of accounting fairy dust with 100% of the firms having missed top-line while 88% beat bottom-line. Is it any wonder that unemployment is rising once again and CapEx is falling?
65% Revenue misses versus 73% earnings beats...
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The accounting fairies have been busy meeting and beating those expectations...
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and the reaction - as expected - earnings beats have tended to outperform - but some beats have been sold (outlooks) - though at a sector level they have all risen (floated by the market)...
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and revenue misses and beats are much more in line with performance over the two-dayts post announcement...
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Charts: Bloomberg