U.S. Company Profits Bigger Than Wall Street's Lofty Targets
Much stronger-than-expected profit reports from US companies in recent weeks have ratcheted up already high Wall Street forecasts on how second-quarter earnings growth will look versus last year.
Photo Insert: Recent profit reports from U.S. companies, which have been stronger-than-expected, are drumming up hopes for a fully recovered economy
Earnings are now expected to have climbed about 90% in the second quarter versus analysts' forecasts of 65.4% at the start of July, according to IBES data from Refinitiv, with results in so far from roughly 300 of the S&P 500 companies as of Monday morning, Caroline Valetkevitch reported for the Associated Press (AP).
Nearly 89% of the reports are beating analysts' second-quarter profit estimates - the highest percentage on record, based on Refinitiv data going back to 1994.
A gangbuster second quarter is expected to mark a peak for recent US earnings growth as companies recover from the depths of last year's pandemic-induced profit collapse.
"Except for a few disappointments here and there, everybody has had solid earnings. It has been a tremendous earnings season, but it was supposed to be," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.
"It will be interesting when you start getting deeper into third and fourth quarters. The market might be anticipating a bit of a trip-up."
Third-quarter earnings are estimated to climb 29.6% from a year-ago quarter. Fourth-quarter earnings are seen gaining 21.2%, based on Refinitiv data.