With results from 110 of the S&P 500 companies on Thursday, 85.5 percent have surpassed analyst estimates for earnings per share, according to Refinitiv.
While it’s still early in the earnings period, a record percentage of major U.S. corporations ‘earnings reports in the first quarter are above analysts’ expectations.
Earnings are rebounding from the lows sparked by the pandemic last year, but many companies were reluctant to provide guidance, making it more difficult for analysts to estimate results for this year. Some strategists said stronger-than-expected gains could help support the market, even if valuations are viewed as expensive.
With results from 110 of the S&P 500 companies on Thursday, 85.5 percent have surpassed analyst estimates for earnings per share, according to Refinitiv. If this trend continues through the reporting season, it would be the highest hit since 1994.
An average of 78 percent of companies have exceeded earnings estimates in the past four quarters.
More than expected results from big banks and other companies have pushed up the forecast for the quarter. Earnings are now expected to be 33.3 percent year-on-year for the first quarter, compared to 24.2 percent at the beginning of the month, based on data from Refinitiv.
This is expected to be the highest quarterly earnings growth since 2010 after the financial crisis.
However, the S&P 500 has risen less than 1 percent since mid-April, when the profit period was in full swing. Wall Street fell Thursday as sources said U.S. President Joe Biden would propose raising taxes for the rich next week to fund about $ 1 trillion in investments.
A resurgence in coronavirus cases around the world added to investor worries.
Earlier this week, Netflix Inc announced that slower production of TV shows and movies during the pandemic hurt subscriber growth in the first quarter and stocks fell sharply.
Despite some high profile disappointments, “the momentum for corporate earnings looks positive,” wrote Mark Haefele, chief investment officer for global wealth management at UBS AG, in a note this week.
“Overall, the US winning season got off to a good start.”