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U.S. first quarter earnings on track for slight gain

Published 28/04/2015, 19:03
© Reuters. A trader looks at his screen as he works on the floor of the New York Stock Exchange
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By Caroline Valetkevitch

NEW YORK (Reuters) - U.S. earnings are on track to post a slight gain for the first quarter following stronger-than-expected results from companies like Apple (O:AAPL), reversing forecasts for the first quarterly profit decline since 2009.

With results in from 47 percent of S&P 500 companies as of Tuesday, first-quarter earnings are expected to have risen 0.02 percent from a year ago, according to Thomson Reuters data, which is based on actual results and estimates for companies still to report.

On April 1, analysts' consensus forecast was for a 2.9 percent profit decline, the data showed, with strategists citing the stronger dollar and sharply lower oil prices as the biggest drags on earnings.

Among the biggest lifts to profit forecasts was Apple's late Monday report. Without Apple, the S&P 500 earnings forecast would show a decline of 1.6 percent, the data showed.

Seventy percent of S&P 500 companies are beating analysts' expectations for earnings so far, while just 44 percent are surpassing revenue forecasts, the data showed.

Revenue is still expected to decline 3.3 percent from a year ago.

"Companies are surpassing margin assumptions in all 10 sectors," Jonathan Golub, chief U.S. market strategist at RBC Capital Markets, wrote in a research note. "In our view, margins are beating because analysts overestimated the bottom-line (earnings) impact from currency."

S&P 500 energy company earnings so far are beating estimates as well. While just 13 of the 41 energy names have reported, 85 percent have beaten profit forecasts and by 11 percent on average, Thomson Reuters data showed.

© Reuters. A trader looks at his screen as he works on the floor of the New York Stock Exchange

Results are due later this week from Exxon Mobil (N:XOM) and Chevron (N:CVX).

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