Thursday, August 19, 2010

Final Earnings Season Stats

Forget the first chart, earnings are easily manipulated and most of the earnings beats were and have been driven by cost cutting measures. The real chart that people should be focusing on is the top line. You can see that we may be starting an alarming trend with 3 consecutive quarters of declines in the number of companies beating on the top line. There is only so much you can cut...Eventually you have to grow sales.


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via Think BIG by Bespoke on 8/19/10

Earnings season ended this past Tuesday with Wal-Mart's report, and below we highlight the final tally for companies that beat both earnings and revenue estimates.  As shown below, 65.8% of companies beat earnings estimates, while 63% beat revenue estimates.  The earnings beat rate was higher than last quarter but lower than the three quarters prior to that.  The revenue beat rate was lower than last quarter, which was weaker than the quarter before that.  Earnings numbers started out very strong, but by the end of earnings season, the numbers were just about inline with prior quarters over the last year or so.  As we're seeing today, investors have moved on to economic numbers, and they aren't too pretty right now.

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