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With second-quarter reporting season nearly complete, 79% of
companies have posted earnings that beat analysts' expectations,
according to fresh data from Refinitiv I/B/E/S.
In a typical U.S. earnings season, most companies report results
that are higher than analysts' average estimates, but the number
of beats and misses varies by quarter.
This quarter's beat rate for earnings per share is the highest
since the third quarter of 2021, and it suggests an uncertain
economy has hurt companies less than feared.
However, nearly 64% of companies have posted revenue that
exceeded Wall Street's expectations, the lowest beat rate for
that metric since the first quarter of 2020.
The recent upbeat earnings performance of many S&P 500 companies
follows waves of job cuts this year, prompted by worries the
U.S. Federal Reserve's aggressive interest rate hikes might
throw the U.S. economy into a downturn.
Major technology-related companies including Meta Platforms,
Amazon and Alphabet have laid off tens of thousands of workers,
solidifying their profit margins while their revenue continued
to grow.
Amazon.com's stock surged over 8% on Friday after it reported
sales growth and profit that both beat Wall Street's
expectations.
In quarterly reporting seasons going back over two decades, 66%
of companies have beaten on earnings and 62% have exceeded
revenue estimates.
While mostly beating estimates, second-quarter earnings are on
track for an overall decline of 4.2% year over year, according
to Refinitiv I/B/E/S.
Excluding the energy sector, S&P 500 earnings have climbed 2.0%,
moving into positive territory for the first time after the four
previous quarters.
Second-quarter revenue so far has increased 0.2%, and grown 4.0%
excluding energy companies.
(Reporting by Noel Randewich; Editing by Cynthia Osterman)
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