Earnings Season

Senate leaders finally reached a deal to avoid a debt default and reopen the Government. Now the focus return to fundamentals and earnings season.

“40 S&P 500 companies have reported 3Q results – 40% of companies have beaten earnings estimates, below historical average of 47% – 18% have missed vs. average of 15% – average EPS surprise 1%, below 5% historical average. 23% of companies reporting have beaten revenue estimates (below the historical average of 35%) and 18% have missed estimates (vs. average of 20%). The average revenue surprise has been in line with consensus, below the 1% historical average.” (Goldman Sachs)

“Of the 31 companies that have reported earnings to date for the quarter, 61% have reported earnings above estimates. This percentage is below the average of 73% recorded over the past four years. In terms of revenue, 52% of companies have reported sales above estimates. This percentage is below the average of 58% recorded over the past four years. In aggregate, companies are reporting earnings that are 18.0% below the mean EPS estimate. This percentage is well below the average of 6.5% over the past four years.” (Factset)

“Even with earnings expectations being ratcheted downwards heading into Q3 only 52% have topped revenue estimates while the number of companies beating expectations plunged to its lowest since Q1 2009.” (Barclays)

Earnings Beat

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