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Each earnings season, most companies will report earnings per share that exceed the consensus estimates among analysts working for brokerage and research firms. A typical “beat rate” is 80%, so it means approximately nothing. What might be more interesting for investors is to look at sales growth and profit margins.
One-time events can affect companies’ bottom lines, but gross profit margins and operating margins will exclude some of those extraordinary items, such as goodwill write-downs or restructuring charges. So we have screened the S&P 500
SPX for companies showing the greatest increase in revenue per share this earnings season, while also expanding the two profit margins.
