More than 2,000 companies have reported their Q1 2016 numbers so far this earnings season, and below is a look at the percentage of companies that have reported stronger than expected EPS and revenues. The first chart below shows the bottom-line earnings beat rate (% of companies posting EPS that are above consensus analyst estimates) by quarter going back to 1999. As shown, so far this season, 61% of companies have beaten estimates. As recently as last Monday, the beat rate for this season was tracking at 65%, which would have been the strongest reading since 2010. But last week’s reports really brought down the overall beat-rate tally, and now this season is tracking below last season’s.
The top-line revenue beat rate is much harder for companies to massage each quarter, and that’s why many investors put more stock in it over the earnings beat rate. So far this season, 55% of companies have beaten consensus analyst revenue estimates. That’s six percentage points below the bottom-line EPS beat rate, but it also would be the strongest revenue beat rate since Q4 2014 if it can hold.
Wal-Mart (WMT) reports earnings in the middle of next week, and Wal-Mart’s report is the unofficial end to earnings season. Hundreds more companies will report between now and then, so there’s still time for these readings to shift a bit.
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