Through Friday, 83 per cent of companies that have announced Q1 earnings have beaten analysts’ estimates, making this one of the best seasons for beat rates in years.However, Morgan Stanley’s Adam Parker adds a little more colour to what’s really going on.
In a recent note to clients, Parker wrote that aggregate earnings were tracking 5.9 per cent ahead of consensus. What’s interesting is what’s driving these earnings.
From Parker’s note:
That said, outside of the financials, the beats are concentrated in a few companies with the top five contributors – ORCL, AA, IBM, INTC and GOOG – accounting for about 50% the upside relative to consensus.