Earnings Season

With nearly 24% of the S&P 500 companies finished reporting, the Q1-2012 earnings season is off to a great start. Of the 119 companies that have officially reported Q1-2012 results, 80.7% have exceeded industry analysts’ estimates and 76.1% beat sales estimates. In contrast, in Q4-2011 only 62.7% beat consensus earnings estimates and 55.7% beat sales forecasts. Earnings for these 119 companies are up 10.4% y/y on sales growth of 4.3%, ahead of forecasted growth of 2.1% and 2.1%, respectively, for the same companies. Instead of the 3% earnings growth that analysts currently expect, I think final Q1-2012 earnings growth for the S&P 500 will be slightly short of 10% for a second straight quarter.

Today’s Morning Briefing: Waiting for the Other Shoe to Drop (1) Triple-E: Earnings, Economy, and Europe. (2) The case for remaining bullish. (3) Earnings are impressive. (4) The US economy is OK on average. (5) Europe isn’t OK, but IMF members pledge more bailout cash. (6) The other shoe is made in China. (7) Neutral for now, but next stock rally should favor Consumer Discretionary, Financials, Industrials, and IT, with Energy and Materials lagging behind. (8) Canada’s condo mania. (9) Europe's PMI. (10) Opting for optimism on US economy. (More for subscribers.)