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Is Optimism about Earnings Still the Watchword?

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Including all of this morning’s releases, we now have Q3 results from 69 S&P 500 members that combined account for 19% of the index’s total market capitalization. Total earnings for these 69 companies are up +20% from the same period last year on +7.8% higher revenues, with 84.1% beating EPS estimates and 62.3% beating revenue estimates. The proportion of these 69 companies beating both EPS and revenue estimates is 55.1%.

The comparison charts below put these results in a historical context

The earnings and revenue growth pace thus far represents deceleration from what we had seen in the first half of the year, but the proportion of positive revenue surprises is tracking notably  below other recent periods. In fact, the proportion of positive revenue surprises at this stage in the Q3 earnings season is the lowest since the first quarter of 2017.

Another area of uncertainty is the impact of trade tensions on profitability and outlook, as we saw with the W.W. Grainger (GWW - Free Report) and Fastenal (FAST - Free Report) reports.

For more details about the Q3 earnings season and the overall earnings picture, please check our weekly Earnings Trends report  >>>>  Positive Start to Q3 Earnings Season

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