Just two months back, the expectation was for earnings growth to arrive in the first quarter of 2021, with 2020 Q4 earnings expected to be below the year-earlier level. That is no longer the case, with better than expected Q4 results pushing the earnings growth rate for the quarter into positive territory.

We discuss in the accompanying podcast what role aggressive cost cuts has played in the Q4 earnings growth. The bottom line is that the Q4 earnings growth isn’t solely a result of effective cost controls, as a number of the major sectors like Technology have shown impressive revenue growth.

With respect to standout elements of the Q4 earnings season, we point out the market’s differentiated reaction to otherwise similar looking strong results. For example, the market essentially shrugged record results from Amazon (AMZN Quick QuoteAMZN - Free Report) , Apple (AAPL Quick QuoteAAPL - Free Report) and others while it rewarded similarly strong results from the likes Alphabet (GOOGL Quick QuoteGOOGL - Free Report) , Netflix (NFLX Quick QuoteNFLX - Free Report) and others. This likely reflected the individual stock’s performance in the lead up to the quarterly report, with previous laggards getting rewarded for strong results.

With respect to scorecard, we now have Q4 results from 358 S&P 500 members or 71.6% of the index’s total membership. Total earnings for these companies are up +5.8% from the same period last year on +3.2% higher revenues, with 80.7% beating EPS estimates and 78.2% beating revenue estimates.

For a detailed look at the overall earnings picture, please check out our weekly Earnings Trends report: A Very Strong  Earnings Picture