Good news reigns - Earnings Season takeaways:

Good news reigns - Earnings Season takeaways:  

Bottom Line: With four weeks of earnings in for the third quarter earnings season and the exceptional news of a 3% growth economy in the third quarter and lowest unemployment rate in nearly 17 years despite the headwinds (no pun intended) of hurricanes, there's plenty of reason to be excited about the economic momentum we have in the country. The first couple of weeks produced earnings that just kept getting better. We had earnings growth of 4.7% through the first three weeks of earnings season. One in five companies had also reported a negative impact due to the hurricanes. Last week was another busy one for earnings season and the story continues to just get better. Here's the latest: 

  • 81% of companies have reported   

  • 74% have reported positive earnings surprises and 66% have topped sales targets   

  • Earnings growth has been 5.9%!  

By the end of September, after the impact of Harvey and Irma, earnings growth estimates had been cut to 3%. The prospects of a sustained 3% growth economy had also gone by the wayside. That's all now reversed. Companies are blowing through that 3% mark and there's a chance that earnings will double the growth estimates. The economy did post 3% growth in the third quarter despite what the government identified was more than $120 billion in negative economic impact in the third quarter due to the hurricanes. The room for optimism reigns.   

 

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