Now, it should really come as no surprise at all that earnings are just about always "better than expected". After all, if you understand anything about how companies underpromise so they can overdeliver, then you know that the analysts are mostly pawns in the expectations game, and savvy corporate management plays them like a fiddle most of the time. So it's not uncommon to see 65%+ of all companies with "better than expected" earnings just about every quarter.
But what's interesting about this quarter is just how uneven the performance has been. John Hussman posted this chart on Twitter, showing the extremely discrepancy:
So far, 66% of all reporting S&P 500 firms have beaten expectations. Financials have led the pack with a 75% overall beat rate. With financials making up the vast majority of the "beat" it's clear that earnings have been "better than expected", but the quality of earnings is definitely declining on the whole. Financials have benefited from improved market conditions (which has translated to better M&A and investment banking revenues), improved trading conditions, and improvements in the overall private sector debt situation (which has helped defaults and loan demand).
I guess you could say that it looks better on the surface than it really is. Still, S&P earnings are growing 4.5% year over year and revenue growth is just north of 4%. That's not terrible, but it's way down from the growth we've been seeing in recent years and much more in-line with the weak general economic environment.