An employee of the Korea Exchange Bank counts money next to stacks of one hundred U.S. dollar banknotes at the bank's headquarters in Seoul, Aug. 11, 2011.JO YONG-HAK/Reuters
With regards to the first-quarter's earnings season, you can be forgiven for thinking that you've seen this movie before, because the results are following a familiar script.
It's the same old, same old. Before the quarter's end, managers give downbeat guidance, analysts lower their projection and then companies outperform subdued expectations, giving a boost to their shares.
Just before companies started releasing their results in early April, the consensus had overall quarterly per share earnings coming in with a gain of a mere 0.58 per cent, or basically unchanged.
But with 405 firms in the S&P 500 reporting so far, the numbers are far better than expected. According to Capital IQ's weekly earnings report, companies have reported a 7.1 per cent earnings per share surprise to the upside, with 69 per cent posting profits that beat Street expectations. Leading the pack are the telecommunications, financial, and consumer discretionary sectors.
As earnings season winds down, investors can take some comfort that the results have blown past expectations, giving support to the recent record highs in both the Dow Jones industrial average and the S&P 500.
That said, the raft of weaker-than-expected economic figures recently might make a repeat performance of an earnings beat after the second quarter harder to achieve.