U.S. companies will continue to issue quarterly earnings reports, but the fourth quarter reporting season wrapped up – unofficially, at least – with Tuesday’s earnings from Wal-Mart Stores Inc. Talk about ending on a sour note: Wal-Mart shares flopped 3.9 per cent after the retailer disappointed expectations on just about every measure.
But the overall season has also been disappointing, when you measure earnings against analysts’ expectations. According to Bespoke Investment Group, 60.4 per cent of companies beat earnings expectations, which is a little below the historical average of 62 per cent and well below the peaks seen during the early stages of the economic recovery.
However, the stock market doesn’t seem put out: As Bespoke noted, the S&P 500 has risen 6.5 per cent from the unofficial start of the earnings season to its conclusion, which is one of the better showings in recent reporting seasons. Then again, since the stock market tended to ignore strong earnings in many previous reporting seasons, maybe it is now ignoring a disappointing one.
