Hedgeye - Earnings Season Update: Still Coming in Hot!

Editor's Note: Below is an excerpt from a recent institutional research note written by Macro analyst Ben Ryan. To read this entire Macro research note email sales@hedgeye.com.

Here are some key takeaways from 2Q 2018 earnings season:

Top-Down Trends: Mirroring Q2 GDP growth, Aggregate year-over-year sales and earnings growth for S&P 500 constituents is running at its hottest pace of what is now 8 consecutive quarters of earnings growth (second derivative acceleration). Sales and earnings growth for the S&P 500 index in aggregate has come in at +10.2% and +27.2%, respectively. 10.2% is the hottest year-over-year rate of top-line growth since Q3 2011, and earnings growth of 27.2% YY is the biggest delta since Q4 2010, both on the back of recessionary comps.
Broad-Based Strength: Every sector in the S&P 500 and Nasdaq 100 index has reported sales and earnings growth. Should this trend hold, it would be the 4th consecutive quarter of top and bottom line growth for all S&P 500 sectors.
Beat Rates: Our analysis on beat rates looks at reported prints relative to expectations prior the print. Because corporates have become accustomed to managing expectations, we look at beat rates for a given quarter relative to average beat rates over time. On the top-line, S&P 500 companies have beaten estimates by 1.5% so far in Q2 which is the widest beat rate since Q4 2014 (Also 1.5%).