May 8, 2023 - Economy

😅 Earnings recession or not, Q1 data has been good

S&P 500 earnings-per-share
Data: FactSet; Chart: Axios Visuals

Despite plenty of hand-wringing over the economy, first-quarter profit and sales numbers have been strong, and analysts are lifting expectations for the rest of the year.

State of play: Corporate America's results almost always arrive better than expected, a reflection of executives' penchant for underpromising and overdelivering.

By the numbers: Data provider Refinitiv says that the roughly 420 companies that have reported first quarter results are posting net income 7.2% higher than expected. (That's better than the roughly 4% over-performance they typically deliver.)

  • Top line sales have been better-than-expected too, arriving 2.5% higher than expected, compared to the long-run average of 1.3% positive surprise.

Yes, but: For the record, as of right now, earnings for the first quarters are still expected to be down about 2%, from the first quarter of 2022.

The bottom line: Even so, the numbers — but more importantly the outlook from executives whose helpful winks and nods guide the analyst forecasts — have been pretty darn good.

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