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A Look A Reported Earnings, And Subsequent Price Performance

A Look A Reported Earnings, And Subsequent Price Performance by Jennifer Thomson, Gavekal Capital

With slightly more than half of the constituents in the MSCI World Index having reported 2Q results, we thought it would be useful to take a look at the trend in sales and earnings so far. In the developed world, about 54% of those companies that have reported sales results have surprised positively, led by the Health Care and Financials sectors. The most negative sales surprises have been concentrated in the Consumer Staples, Inc. (NASDAQ:SPLS), Materials, and Industrials sectors. On the bright side, just over 40% of Consumer Staples companies have reported as of July 31st– so there is room for improvement in the group.

MSCI The World Index (Sales)

With respect to earnings, Health Care is by far the dominant sector with respect to positive surprises at just over 80%. The Energy sector has the dubious distinction of actual earnings results averaging about 2.5% less than expected earnings. Curiously, the Utilities sector has the lowest percentage of positive surprises (just over 50%), but the highest percent of companies experiencing a positive price impact.

MSCI The World Index (Earnings)