Earnings season is underway with just under a quarter of S&P 500 companies reporting results so far.
But this round of earnings is particularly important for investor confidence, as Wall Street looks for signs that the U.S. economic recovery hasn't stalled. CNBC analyzed the latest Earnings Season Scorecard from Thomson Reuters to assess how this season is shaping up and to see if there are any patterns or trends developing.At this point, roughly 67 percent of companies that have reported have beat expectations on profit, 20 percent fell below estimates and 13 percent have matched. Those statistics might make investors feel that the season is progressing nicely, but earnings alone may not tell the whole story.
Earnings are a measure of a company's profitability, but they can also reflect how companies manage their businesses. Variables come into play when calculating earnings, including raw material costs, cost of labor, as well as operating income and expenses.
But top line numbers — or a company's sales — can be equally important because they speak directly to how much of a firm's product is selling.
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