US companies leap over low profit hurdle in coronavirus-hit quarter
NEW YORK: A record high percentage of US companies are beating analysts’ forecasts this earnings season, giving investors a glimmer of hope in what is still expected to be the slowest profit period since the financial crisis.
More than halfway through second-quarter earnings, 82.1 per cent of companies reporting have surpassed profit expectations, which would be the highest in the history of Refinitiv IBES data going back to 1994.
What’s more, the size of the beats is well above what is typical. S&P 500 companies have beaten earnings expectations by a whopping 21.7 per cent, also set to be the highest on record since 1994, based on Refinitiv’s data.
The latest big boost to numbers came late last week, when results from
More than halfway through secondquarter earnings, 82.1 per cent of companies reporting have surpassed profit expectations, which would be the highest in the history of Refinitiv IBES data going back to 1994.
Facebook and trillion-dollar market value companies Apple, Amazon.com and Google parent Alphabet surpassed forecasts.
In many cases, estimates had been lowered so much ahead of earnings season that they were easier to beat, strategists said. Still, the results bolster the case for investors betting that the impact of coronavirusled lockdowns and layoffs on companies’ bottom lines may not be quite as dire as previously believed.
“What it’s saying is there are pockets of absolute strength in corporate America,” said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey.
Tech results in particular suggest “there is spending going on globally,” she said.
The S&P 500 is up nearly 4 per cent since results began in mid-july, putting it 3.4 per cent from its February record closing high. — Reuters