The market waited, and is still waiting, to see whether United States companies have increased their profits during the past few months in light of hard circumstances they have been facing. The numbers now confirm that corporate growth has exceeded expectations. In only one week of reporting, around 77% of the results were surprisingly better than the markets expected, beating analyst predictions.
On October 11 Alcoa kicked off earnings season in the United States and their results are one of the main disappointments up until now. The company is one of 9 out of 39 companies on the S&P 500 that has posted a smaller profit margin than was expected. Other companies have yet to publish results as of yesterday according to data collected by Bloomberg.
The joy keeps coming
That companies are doing better than expected is a major tonic for the last quarter, since Consulnor showed that the percentage of positive surprises was just 70.7% in 2010.
It is not important that the S&P 500 has kept inching upward, because at the beginning of this earning season investment banks estimated that the Dow would grow by 13%. The majority of American companies continue to demonstrate that they are adapting to economic hardship in the best way they can. The first bank to have faith in that was J.P. Morgan. The bank's numbers left it clear that the today's investing context has touched a nerve (they only earning 3.7% more with respect to the same quarter last year), but that they have endured without a drop in profits as was expected.
