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Earnings: Better than expected and better than feared. For the most part, the big names continue to beat. There are a few exceptions: Morgan Stanley the first big bank to outright miss .
The big emerging trend this quarter: Revenues are light. It's early ... about one-fifth of the S&P 500 index components have reported so far, but here's how it looks:
1) Some 66 percent of those reporting have beat (above the 62 percent historic norm) on the bottom line, but only 42 percent have beat on revenues.
2) On average, the companies that have reported earnings are beating by 6.4 percent, but revenues have MISSED expectations by 1.6 percent.
Why is this happening? You can massage the bottom line a little easier ... you can pull out special charges, you can increase cost savings, but the lack of revenue growth is hard to hide.
You can see this with International Business Machines: Earnings were up 13 percent year-over-year, but sales were up barely 1 percent, using constant currency.
This quarter’s other major earnings trend: Stocks that miss or disappoint on guidance, but trade up.
Take Qualcomm; it missed by a penny , and earnings per share and revenue guidance for the current quarter were both below estimates. The result: Stock trades up nearly 6 percent pre-open. Huh? True, it talked up the December quarter, but that's a long way away.
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