Q1 Earnings pre-announcements better than expected – signal improving profits

Thomson ONE just published results of the pre-season earnings announcements for the S&P 500.  79% of the 28 companies that pre-announced beat estimates by an average 9%.  This is FAR BETTER than the long term average of 62% of pre-announcements beating estimates.  They go on to report that the preseason earnings results have predicted the rate at which companies have reported better-than-expected results in the entire earnings season about 2/3 of the time. The blue line in the following chart is the pre-season “beat” rate.  Only the recovery from the 2008/2009 financial crisis has shown a better beat rate in the last 10 years.  This is GOOD!  Jeb B Terry, Sr. April 10, 2012

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