Beating Lowered Expectations

In today’s newsletter, I wrote:

We’re still fairly early in the Q4 earnings season. Some 109 of the 500 stocks in the S&P 500 have reported so far. Of those, 74% have beaten their earnings estimates, while 67% have beaten their sales estimates. Unfortunately, those numbers sound better than they are when we consider that going into earnings, many companies had rolled back expectations. Essentially, they lowered the bar to the ground and now expect applause from investors for stepping over it. Well, that hasn’t been happening.

Now I have a graph to back up that point. This is the estimate over time of earnings for Q4 2013 (courtesy of S&P).

image1381

So yes, we’re beating expectations.

Posted by on January 24th, 2014 at 1:49 pm


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