We've now gotten enough earnings releases for the quarter to begin analyzing overall reporting trends. Below are charts highlighting the current and historical earnings season "beat rate," which is the percentage of companies that beat earnings per share estimates. The first chart shows how the beat rate has progressed since the third quarter reporting period started on October 7th. The beat rate moved above 70% last Friday, hit a high of 76.6% yesterday, and dropped to 74.1% after all of this morning's numbers came out.
The second chart highlights the quarterly earnings beat rate going back to 1999. The average beat rate since then has been 63%, and the reading has been above average for the last five reporting periods. At 74%, the current beat rate would be extremely high by historical standards, but it's still very early in the season and the number is likely to come down as more and more companies release. We'll keep readers updated with the numbers as earnings season progresses.
click to enlarge