JPMorgan Beat Earnings Estimates? Everyone Beats Estimates

Takeaway: Companies rarely miss consensus earnings estimates. That's why it's the year-over-year earnings and sales numbers that matter.

JPMorgan Beat Earnings Estimates? Everyone Beats Estimates - earnings cartoon 04.25.2016


JPMorgan shares are up more than 2% today after reporting earnings that beat consensus estimates. Not so fast. As our Macro team points out in a note sent to subscribers earlier this morning, overcoming analyst earnings expectations isn't the metaphorical albatross the media makes it out to be:


"JPMorgan kicked off bulge bracket earnings this morning and the headlines of the top stories all centered around JPM 'beating' estimates. As you can clearly see [in the chart below] where we show an earnings beat/miss heatmap (where companies print relative to where consensus expects) everyone beats estimates. It’s part of modern financial reporting, and much less relevant than Y/Y earnings growth. JP Morgan reported a -1.4% hit to net income in Q2 Y/Y to kick off what we think could be another disappointing earnings season for Q2."


In essence, companies rarely miss consensus earnings estimates. That's why it's the year-over-year earnings and sales numbers that matter.  


Click the image to enlarge.

JPMorgan Beat Earnings Estimates? Everyone Beats Estimates - earnings beat


While we're on JPMorgan...


Hedgeye Financials analyst Josh Steiner has the brief breakdown of JPMorgan's results today:



Here's to digging deeper than perceived reality.

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