The S&P 500 just experienced its first 10%+ correction in two years right in the middle of earnings season. So how do beat rates look this earnings season? Excellent.
Even with analysts hiking their Q4 EPS estimates at the fastest rate in a decade coming into earnings season, companies have had no problem beating those estimates. Thus far, with more than 1,000 companies having reported, 70% have beaten consensus analyst EPS estimates. The 70% beat rate puts this quarter on track for the strongest bottom-line beat rate in more than ten years.
And while bottom-line numbers have been really impressive, top-line revenue beat rates have been even stronger this season. As shown below, 73.4% of companies that have reported have beaten consensus analyst revenue estimates. That’s tracking to be the strongest top-line beat rate since Q3 2004!
Again, these beat rates would be impressive in any quarter, but what makes them really stand out is that analysts were hiking estimates coming into this season, and companies have still managed to beat estimates at a very high clip. So far, analysts have not hiked estimates enough!