frosty

Wall Street Breakfast: Must-Know News

This is the third quarter in a row that the great preponderance of companies 'beat' analysts estimates. In my opinion this says more about the quality of analysts than the quality of results. Statistical expectations would be that the 'average analyst expectation' would be high half the time and low half the time but on the average, across all companies analyzed, would be close to right. Analysts consistently underestimating earnings for the vast majority of companies tells me that they just don't know much about the companies they are supposedly following. Our economy is shrinking, most companies' sales growth is negative as is their profit growth, yet to read through the list above with 80% green and 20% red (59 to 15, a few in-line) one might easily conclude that results are on a tear. I think you do a disservice to readers by making the principal highlight comparison to analysts erroneous expectations rather than making the principal highlighti comparison to companies' last quarter/last year.