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The TMX Broadcast Centre in Toronto
The TMX Broadcast Centre in Toronto
(Frank Gunn/THE CANADIAN PRESS)

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This earnings season, sales growth is in short supply

As U.S. corporate earnings season limps along, top line revenue growth is emerging as the scarcest of commodities – and one that’s being richly rewarded by equity investors. The trend of low sales growth is already apparent in Canada, where 31 S&P/TSX composite companies have reported this quarter.

Bespoke Investment Group recently noted that while the percentage of S&P 500 companies that are exceeding analyst earnings expectations is within the normal range at 61 per cent, only 45 per cent of companies reporting have exceeded expectations for sales. This rate is only barely higher than it was in the depths of the financial crisis.