Bears are dismissing good Q2 earnings arguing that they are backward looking and do not take into account the deteriorating economy in May and June. So far however, corporate executives, who are right in the thick of things one month into Q3, are providing pretty optimistic guidance for the rest of the year.
So far this earnings season, 10% of US companies have raised guidance while 2.7% have lowered guidance. Below is a chart showing the quarterly spread between the percentage of companies raising guidance and lowering guidance. As shown, the 7.3 percentage point spread so far this quarter is higher than any other quarter since 2001. There are still a significant amount of companies left to report this season, but for now, guidance numbers have been very strong.
Also worth noting is that this is the fifth straight quarter where positive guidance has outnumbered negative guidance. The second longest streak (since 2001) of positive guidance spreads was three quarters from Q3 ’03 to Q1 ’04.
Related posts:
- Guidance Remains Strong
- EARNINGS SEASON: Positive Guidance Holds Steady
- Q1 Earnings Beat Rate
- EARNINGS WATCH: 79% OF S&P 500 COMPANIES HAVE BEATEN ESTIMATES
- Q1 EARNINGS 16% ABOVE ESTIMATES SO FAR
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