Beating expectations has become the 1Q norm. The consenus among financial analysts was that corporate America had already squeezed as much profit as it could from a weak economy.
The analysts couldn’t have been more wrong. So far most companies have reported better than expected earnings. And by most, I mean about 8 out of 10.
It started with Alcoa, which reported a profit of $94 million, or 9 cents a share. Analysts were expecting a loss of 4 cents per share. On Tuesday, Apple surprised the experts with a profit of $11.6 billion, a whopping $12.30 a share. Analysts predicted $10.06 per share.
In between a slew of other companies have reported positive earnings.
If the experts could be so wrong about 1Q earnings, maybe the economy is doing better than they’re telling us. Or maybe this will be the highwater mark for 2012. I’m thinking the economy is slowly getting better and profits will be the norm this year.
Here’s a different view from Randall W. Forsyth writing for Barrons.com: