EPS Beat Rate at 85%

While stocks are trading lower Friday because of a poor reaction to Bank of America's (BAC) and General Electric's (GE) earnings reports, the third quarter earnings season has gotten off to a stellar start.

Since Alcoa (AA) kicked off earnings season, 85% of US companies have beaten earnings estimates. While we still have a long way to go this reporting period, the current beat rate is well above any other quarter since at least 1998. Even with analysts raising estimates significantly leading up to earnings season, companies have still managed to come in better than expected so far.

Comments

[commoinsens...:]

what a bogus statistic. companies low balling and then beating estimiates? what's the real growth rate of these companies or P/E's ?

Oct 16 01:23 PM

[Michael Clark:]

Beat earnings 'estimates'. When 85% of companies had higher earnings than last year or even last quarter, than means something. When 85% of companies beat 'professional estimates' of those who WANT stocks to go up, who MAKE MONEY when stocks go up, whose profession is to talk people into giving up their money to invest in risky assets, who are out of work if people don't invest....I don't really put much stock in that, pardon the play on words.

Oct 17 06:13 AM

[CautiousInv...:]

With stubborningly high unemployment, continuing concerns about weak final demand, flexibility in accounting standards and limits to cost cutting, I should think top line revenue would be sharing the spotlight with earnings. From the S&P site it appears as if operating earnings are expected to fall 6% yoy while revenues are expected to fall 14% yoy. How are reported revenues stacking up against estimates?

Oct 17 10:33 AM