Most of a highly anticipated corporate earnings season in the U.S. has come to pass and has underscored the divergence between the energy sector and other sectors. Given the woes of the stock market to start 2016 and global economic concerns, investors have been eager to gauge how well corporate profits are holding up.
The rout in the energy sector is weighing down S&P 500 earnings. In addition, U.S. multinational companies face slowing export growth and international revenue figures look worse when reported domestically due to the strong greenback.
As of Feb. 2, 66 percent of the S&P 500 (by market capitalization) has reported 2015 fourth quarter earnings. RBC tabulates that earnings are beating expectations by 4.9 percent and revenues have now surprised by 0.3 percent.
For most of this quarter’s earnings season, however, revenues had been lower than expectations. The challenge for companies is to keep growing sales instead of cutting costs to boost profit.
