Q1 Earnings Season Has BLOWN AWAY Expectations, Even Adjusted For Apple

High Jump

We’re about to wrap up what was supposed to be one of the worst earnings seasons in years.

Days before Alcoa kicked off Q1 earnings season, Wall Street’s consensus called for S&P 500 earnings to fall 0.1 per cent year-over-year, according to data compiled by FactSet.

But Wall Street couldn’t have been more wrong.

Of the 453 S&P 500 companies that have announced earnings so far, 72 per cent have beaten analysts EPS estimates

Overall, earnings are now on track to grow 7.3 per cent year-over-year.  Adjusted for the huge influence of Apple’s staggering growth rate, the earnings growth rate would be 4.9 per cent.

Key Themes

  • High food and energy costs are squeezing profit margins.  There were 96 companies that reported revenue increases and earnings decreases.  This is the highest number since Q3 2008.  Many of these companies came from the consumer discretionary and consumer staples sectros.
  • Emerging market demand is expected to pick up in the second half of the year.
  • Weakness in the eurozone and the strengthen of the dollar against the euro will pressure sales in upcoming quarters.

Read more at FactSet.com.

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