Earnings season is beating revenue expectations, despite the meme that it isn’t.
Yes, General Electric (GE), Texas Instruments (TXN), and IBM (IBM) may have delivered less revenue than analysts were expecting, but overall, companies have been over-delivering on revenue.
Yesterday the investment world was up in arms about weak top-line numbers this earnings season. IBM and TXN reported weaker-than-expected sales the prior evening, and market pundits were using those two reports to characterise the entire earnings season trend. We noted how misguided this reasoning was in a post yesterday, and we provided a chart to show that revenue numbers versus expectations this earnings season had actually been much stronger than average (73% beat rate vs. the historical average of 62%).