The earnings game on Wall Street is stacked in favor of generating positive headlines for companies as they “beat” earnings estimates. Investors have learned to take many earnings-season “surprises” with a grain of salt, but some surprises are important enough to drive analysts’ estimates significantly higher, which in turn can support higher share prices over the long term.
The Wall Street earnings game is played by the companies, who might understandably underpromise and then overdeliver with earnings-per-share numbers, as well as the sell-side analysts who base their estimates in part on the “guidance” provided by the companies. Through May 15, 83% of S&P 500 companies that had reported so far this earnings season had beaten consensus earnings-per-share estimates, according to S&P Global Market Intelligence.
Positive sales surprises Among the 454 S&P 500 companies for which FactSet had data for fiscal quarters ended Feb. 17 or later, these are the 10 companies that have had the highest positive revenue surprises through May 15. Sales estimates before the earnings report reflect the consensus of analysts.If you are a shareholder or considering an investment in any of these companies, you should do your own research to understand why sales rose for the quarter.