Earning Growth Strong Across Corporate America

TiffanyS&P 500 companies have nearly completed the second-quarters earnings season, and overall, investors don't have much to complain about.

More than 70% of companies have beaten earnings estimates, the index's earnings have risen more than 19% from last year, and nine of 10 sectors have given us a positive earnings surprise. Telecom was the only sector that missed analyst expectations.

Consumer Companies Are Standing Strong

We found out last week that the consumer was alive and well across most of the S&P 500. This week that trend continued on the top and bottom of the consumer market.

Discount retailer Big Lots (BIG) reported earnings of $0.52 per share, topping consensus estimates by $0.08. And it was no surprise that premium jeweler Tiffany & Co. (TIF), serving the top end of the market, was even stronger in the second quarter. The company reported earnings per share of $0.86, crushing estimates of $0.70.

Consumer-focused companies are strong overall right now, but earnings have shown the top end of the market is holding on much stronger. Not that that should be a surprise.

Sector
Above
Match
Below
Surprise
Reported
Index
Consumer discretionary
78%
9%
13%
9.8%
78
79
Consumer staples
74%
11%
16%
1.7%
38
41
Energy
71%
0%
29%
6.9%
41
41
Financials
67%
9%
25%
12.4%
81
81
Health care
73%
19%
8%
5.0%
52
52
Industrials
66%
9%
26%
3.7%
58
60
Information technology
81%
8%
11%
12.8%
73
75
Materials
63%
7%
30%
1.2%
30
30
Telecom
38%
25%
38%
(4.6%)
8
8
Utilities
55%
12%
33%
2.6%
33
33
S&P 500
71%
10%
20%
7.3%
492
500

Source: Capital IQ Consensus Estimates, a division of Standard & Poor's

Focus Moving to the Third Quarter

There are only five S&P 500 companies reporting this week as we roll the calendar into the last month of the second quarter.

Maker of mining equipment Joy Global (JOYG) is expected to report earnings of $1.55 per share, up from $1.13 last year. And analysts are expecting chicken noodle soup expert Campbell Soup (CPB) to report earnings of $0.38 per share.

After that, we get a breather for the next month -- until we start the game all over again.

With the market concerned about a possible double-dip recession, third quarter results may provide an even more important indicator. If earnings are strong again, we could see the market surge and confidence return. But if earnings flounder, we could be in for a long winter.

Motley Fool contributor Travis Hoium does not have a position in any company mentioned.




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61 Comments

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some11bo

Beware! Google for "Good earnings appear at market tops" to understand how we are building a major top in the stock market.

September 28 2011 at 7:31 PM Report abuse rate up rate down Reply
pblackaby

Why are you bashing one another ? The politicans are the crooks, willing to give more to the rich and taking that from the middle class . The poor don't pay a lot of taxes because they don't have the money to get by on . Get your heads on straight, and look at the true cause of the problems WE face . Politicans must be honest and care about our country first, then things will get better . Greed can't be the driving force in government .

August 31 2011 at 7:02 AM Report abuse rate up rate down Reply
fixitright73

what tea party are you all talking about? and where is it, is there a cover charge?

August 30 2011 at 11:34 PM Report abuse +1 rate up rate down Reply
1 reply to fixitright73's comment
michelebachmann8

I'AM THE QUEEN OF THE TEA PARTY!!.....DON'T FORGET NOW TO PICK UP A COVER OF NEWSWEEK MAGAZINE MY PHOTO IS ON THE FRONT COVER YOU CAN'T MISS IT I HAVE A CRAZY LOOK ON MY FACE. OH YEAH!!!!!!......IT'S ELVIS'S BITHRDAY TODAY!!!!!!!

August 30 2011 at 11:51 PM Report abuse -1 rate up rate down Reply
democracks0

MICHELLE OBAMA SPENDS 10 MILLION DOLLARS ON HER VACATIONS AT THE TAXPAYERS EXPENSE. THAT'S HOW THE OBAMAS SPREAD YOUR WEALTH!!!

August 30 2011 at 11:00 PM Report abuse -7 rate up rate down Reply
democracks0

WHY WOULD ANYONE SIDE WITH DEMOCRATS. THEY CONSTANTLY INSULT THE MIDDLE CLASS(AKA TEA PARTY)

August 30 2011 at 10:57 PM Report abuse -7 rate up rate down Reply
democracks0

MICHELLES10MILLIONDOLLARVACATIONTAB!!!!

August 30 2011 at 10:47 PM Report abuse -5 rate up rate down Reply
democracks0

OBAMASHIGHFOODPRICES

August 30 2011 at 10:46 PM Report abuse -4 rate up rate down Reply
democracks0

OBAMASHIGHGASPRICES

August 30 2011 at 10:46 PM Report abuse -4 rate up rate down Reply
democracks0

THE TEA PARTY IS THE MIDDLE CLASS!!!! EVERY TIME DEMOCRATS INSULT THE TEA PARTY THEY ARE INSULTING THE MIDDLE CLASS. WHAT EVER INSULTS THE DEMOCRATS THROW OUT ABOUT THE TEA PARTY
THAT JUST TELLS YOU HOW THEY REALLY FEEL ABOUT THE MIDDLE CLASS!!!!!!!!!! REMEMBER THAT WHEN YOU GO TO THE VOTING BOOTH IN 2012

August 30 2011 at 10:43 PM Report abuse -3 rate up rate down Reply
1 reply to democracks0's comment
democracks0

WE ALL HEARD DEMOCRAT MAXINE WATERS TELL THE TEA PARTY(AKA THE MIDDLE CLASS) WHERE TO GO!!!!

August 30 2011 at 10:55 PM Report abuse -3 rate up rate down Reply
democracks0

REPUBLICANS WILL BE AT THE LABOR DAY PARADE IN WISCONSIN OR THE MAYOR OF THE TOWN IT WILL BE HOSTED IN WILL NOT FUND IT. LABOR LEADERS WILL HAVE TO PAY. IF THAT HAPPENS I GUESS UNION DUES WILL BE GOING UP FOR UNION MEMEBRS IN WISCONSIN TO COVER THE COST!

LMAO!!!

August 30 2011 at 10:39 PM Report abuse rate up rate down Reply