* EPS Beats below average; sales Beats above average
Only 46% of companies beat earnings estimates so far this quarter, well below the historical average of 53% (see Chart 3). In contrast, sales results showed the third consecutive month of improvement, with 56% of firms posting Beats. However, it may still be too early to draw conclusions: only 19% of firms have reported so far
* Earnings outlook worsens amid declining GDP
Since the start of this earnings season, 2014 consensus EPS growth has fallen to 0.5% from 2.6% (see Chart 1). 2015 expectations have similarly become more pessimistic; EPS growth is expected at 8.3%, down from 10.6% at the start of the season (see Chart 7). Pressure on earnings expectations appears justified: despite our economists revising up 2015 Eurozone GDP expectations by 20bp post-ECB surprise, a fall in nominal GDP in both the Eurozone and the US moving from 2014 to 2015 is expected (see Chart 2).
* Best and worst on EPS Beats
• Sectors: best are Tech (88%), Oil & Gas (71%) and Financials (58%); worst are Healthcare (21%), Consumer Goods (23%) and Industrials (29%)
• Countries: best are Denmark (71%), Netherlands (63%) and Sweden (52%); worst are Switzerland (18%), Spain (29%) and the UK (36%)