US companies leap over low profit hurdle in coronavirus-hit quarter

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A record high percentage of US companies are beating analysts' forecasts this earnings season, giving investors a glimmer of hope in what is still ...

NEW YORK: A record high percentage of US companies are beating analysts' forecasts this earnings season, giving investors a glimmer of hope in what is still expected to be the slowest profit period since the financial crisis.

In many cases, estimates had been lowered so much ahead of earnings season that they were easier to beat, strategists said. Still, the results bolster the case for investors betting that the impact of coronavirus-led lockdowns and layoffs on companies' bottom lines may not be quite as dire as previously believed.

To be sure, the pace of the market's rebound off the March lows has slowed in recent weeks, with earnings coming in as the United States sees a resurgence in virus cases in many areas and economic numbers remain bleak. Strategists at BofA Global Research wrote in a recent note that while margins are"tracking a hair above expectations," they are still expected to collapse and comments from companies suggest more job cuts ahead.Investors have been particularly keen to hear from technology companies, the most heavily weighted sector in S&P 500 earnings.

 

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