Quarterly earnings growth turns positive

August 04 01:35 2015

On July 1, Wall Street analysts were calling for corporate profits to contract in the second quarter. But a solid start to the earnings season has put profits back in the black.

With more than half (263) of the companies in the Standard & Poor’s 500-stock index having reported earnings, profit growth for the April through June quarter has ticked back up into positive territory. The blended estimate for quarterly profit growth — based on results already in and reports still to come — is now +0.8%, according to earnings-tracker Thomson Reuters.

That positive profit growth is better than the 3% contraction analysts were forecasting on July 1. So far, 73% of companies that have reported earnings have topped expectations, topping the long-term “beat” average of 63%.

635594119943931322-AP-FINANCIAL-MARKETS-WALL-STREET-70748234 (1)The negative this quarter has been in sales and revenue, with less than half (49%) of the companies in the S&P 500 that have reported earnings results topping expectations. Analysts now see revenue contracting 3.9% for the quarter, a slight improvement from the -4.1% back on July 1.

 

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