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Photo: Johannes Eisele/AFP via Getty Images

S&P 500 companies have beaten earnings estimates at a higher pace than usual in the second quarter, Deutsche Bank analysts point out in a recent note to clients.

Why it matters: That suggests businesses may have rebounded more strongly than originally thought from the coronavirus pandemic in May and June, they argue.

By the numbers: With 129 companies (32% of S&P 500 market cap) reporting, 85% of companies have beaten the bottom-up analyst consensus, well above the historical rate of 73%. Further, five sectors have so far seen all companies beat, while another three have beat rates above 90%.

  • Companies that have reported have beat by 14% in aggregate, while the median company beat by 12%. These are also well above the average over the past 5 years of 4.9% and over the longer term of 3.4%.

The bottom line: The numbers suggest earnings may be much better than FactSet's current expectation for a 42.4% decline in Q2.

  • However, the numbers still point to a 33% decline, Deutsche notes, with the median company delivering a 21% fall.

Go deeper

Oct 29, 2020 - Technology

Alphabet revenue up 14% after second-quarter slump

Illustration: Lazaro Gamio/Axios

Google parent company Alphabet beat Wall Street expectations in the third quarter of 2020, announcing total revenues of $46.2 billion with its shares rising more than 9% in after-hours trading.

Why it matters: The company rebounded with its revenue up 14% after a tough second quarter, when its saw its first-ever revenue decline attributable to a lowered advertising growth rate amid the COVID-19 pandemic.

Ina Fried, author of Login
Oct 30, 2020 - Economy & Business

The pandemic isn't slowing tech

Illustration: Eniola Odetunde/Axios

Thursday's deluge of Big Tech earnings reports showed one thing pretty clearly: COVID-19 may be bad in all sorts of ways, but it's not slowing down the largest tech companies. If anything, it's helping some companies, like Amazon and Apple.

Yes, but: With the pandemic once again worsening in the U.S. and Europe, it's not clear how long the tech industry's winning streak can last.

Amazon posts strong Q3 results despite ongoing pandemic costs

Photo: Ina Fassbender/AFP via Getty Images

With the pandemic driving consumers to shop online, Amazon beat analyst expectations on Thursday with its Q3 results, though its stock price didn't see much of a bump.

Why it matters: Despite incurring what it estimates was about $2.5 billion in pandemic-related costs during the quarter, Amazon's revenue grew 37% year-over-year to $96.1 billion and its profits to $6.3 billion, up 197% year-over-year.