Companies beat Wall Street earnings estimates at a record pace so far this quarter

So far, so good on the earnings front this quarter.

Third quarter earnings reports have beaten estimates at 79% of the 104 of the 500 companies in the Standard & Poor’s index that have reported so far.

Positive surprises in the second quarter helped fuel a rally that looked like it might be flagging in June. But then just 72%, a record now being challenged by this quarter’s results, reported earnings above e Wall Street estimates.

Sales, which have lagged earnings as companies got much of their profit boost from cutting costs, have so far exceeded estimates at bellwether companies.

 Caterpillar (CAT) predicted that sales could climb25% next year. Sales at Apple (AAPL) jumped 25% in the just reported quarter from the period in 2008.

We’re not out of the woods yet, however, since the sales revival is based on rebuilding inventories drawn down during the slump. If new orders don’t materialize in the fourth quarter, then that inventory rebuilding will be followed by a drop in sales in early 2009.

Still the signs are good, especially in technology. Intel (INTC) signaled that demand for PCs is returning to pre-recession levels and that PC shipments could actually growth in the fourth quarter.

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2 comments

• javos on 21 October 2009

  Remember! Even Bernanke did not see this coming. Still today, there are (1) renewed efforts to prop up housing, (2) new efforts to prop up small business, (3) new cash stimulus for seniors, and (4) a “dollar policy” to boost exports (which costs us more for imports). Connect the dots. Even bumpier roads ahead.
• temptemp337 on 21 October 2009

  “If new orders don’t materialize in the fourth quarter, then that inventory rebuilding will be followed by a drop in sales in early 2009.”

  2010

  Thanks for what you do