Record % in companies beating EPS estimates

In a previous article we spoke about the importance of the earnings announcements and how stock prices move following such. We are now in the period where the majority of companies in the S&P500 have now reported earnings figures for the second quarter of the year.

As we can see from the above bar chart, 80% of companies reported earnings above the expectations, 5% reported actual results equal to the estimates and 16% reported actuals lower the estimates.

The US market has been on fire and pro American policy adopted by the Trump administration seems to be working.

We can see from the chart that during the past year, 75% of the companies managed to beat expectations with the last quarter showing record high level at 80%.

Sector Analysis

At a sector level, the companies which suffered the most where in the Energy sector whereby only 45% managed to beat the estimates. The top performing sector was Telecom with a 100% success rate in companies beating estimates with HealthCare and Tech trailing slightly behind. (see full chart below).

Data source: FactSet

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