Earnings Are Up and Analysts Are Shocked: Ritholtz Chart

Barry Ritholtz is a Bloomberg View columnist. He founded Ritholtz Wealth Management and was chief executive and director of equity research at FusionIQ, a quantitative research firm. He blogs at the Big Picture and is the author of “Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy.”
Read More.
a | A

The second-quarter earnings season is coming to an end so I wanted to share a chart that took me by surprise: bottom-up earnings revisions.

Bank of America Merrill Lynch reports that more than 450 companies -- 93 percent of the Standard & Poor's 500 Index -- have reported earnings. Second-quarter earnings rose 10 percent year-over-year, the best quarterly growth we have seen since the third quarter of 2011.

You can see this reflected in the chart above showing earnings-per-share revisions.

How much of this is a holdover from the first quarter's horrific weather is anyone's guess. But I was astounded to see so many analysts caught off guard by the numbers.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Barry L Ritholtz at britholtz3@bloomberg.net