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Real Time Insight

'It's the most wonderful time of the year'...

I'm talking of course about earnings season. This is always an exciting time here at Zacks since earnings reports are often the catalysts for significant estimate revisions from analysts, which in turn determines the Zacks Rank for a stock.

So far, a healthy amount of companies are beating earnings expectations in Q1. According to Zacks Director of Research Sheraz Mian in his daily Ahead of Wall Street piece, 69% of companies have beaten earnings expectations, which is slightly better than the last few earnings seasons. The revenue picture, however, is not as bright. Less than 1-in-3 companies have delivered positive surprises on the top-line so far.

Approximately 16% of companies in the S&P 500 have reported first quarter earnings, so we're still early in the season.

Future Zacks Rank #1's?

Companies that beat expectations on both the top and bottom lines are good candidates for future Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) stocks. The key will be to watch the direction of earnings estimate revisions from analysts in the coming days.

Listed below are companies that delivered solid earnings and sales suprises on Thursday, April 18:

Privatebancorp (PVTB - Snapshot Report)
EPS Surprise: +25.0%
Sales Surprise: +1.0%

Sandy Spring Bancorp (SASR - Snapshot Report)
EPS Surprise: +13.5%
Sales Surprise: +1.0%

Fifth Third Bancorp (FITB - Analyst Report)
EPS Surprise: +12.8%
Sales Surprise: +2.8%

AutoNation (AN - Analyst Report)
EPS Surprise: +7.9%
Sales Surprise: +2.0%

There were a few negative surprises today too. These companies each reported misses on both the top and bottom lines on Thursday:

Ultratech (UTEK - Snapshot Report)
EPS Surprise: -2.0%
Sales Surprise: -4.4%

Sonoco Products (SON - Analyst Report)
EPS Surprise: -5.7%
Sales Surprise: -1.6%

Virginia Commerce Bancorp
EPS Surprise: -10.0%
Sales Surprise: -3.6%

(If you want to see the full list of earnings and sales surprises throughout earnings season, be sure to visit this page often.)

Sold on Q1 Earnings Season So Far?

Although just 16% of S&P 500 companies have reported so far, a solid 69% of those have beaten earnings expectations, as I noted above. Is that enough to convince you that this earnings season will be fine? Or is it still too early to tell?

And how concerned are you about the lack of revenue beats? Chime in below.

Zacks Releases Their 7 Best Stocks for September, 2014

These 7 were hand-picked from the list of 220 Zacks Rank #1 Strong Buys with earnings estimate revisions that are sweeping upward. Their stock prices are expected to rise sooner than the others.

Today, this Special Report is available to new visitors free of charge.

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