Friday, February 23, 2018

Earnings Coming On Strong

This earnings season has been a banner one. S&P 500 companies are expected to post profit growth of 15 percent in the final three months of the year versus a year earlier, according to FactSet. That would mark the third quarter in the past four in which companies have reported profit growth of 10 percent or more.

Nearly three-quarters of reporting companies have topped analyst estimates, above the five-year average of 69 percent. And firms are expected to have grown their top-line sales numbers by a strong 8.1 percent last quarter.

So why is the S&P 500 is down about 2.4 percent since earnings season kicked off in mid-January? Most analysts seem to think that the strong earnings numbers came as no surprise to most investors. The strong numbers were already baked into stock prices - even before companies started reporting them.

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