about 3 years ago • 1 min
Investors who watch closely when the companies they hold shares in report quarterly earnings may have noticed something odd: American firms always seem to exceed analysts’ estimates.
As the chart above shows, US companies are adept at setting themselves up for success in the earnings game. Around three-quarters will beat expectations in an average quarter.
But, like the boy who cried wolf, in recent quarters the market seems to be ignoring these supposed successes – and investors are selling shares even when profits top Wall Street’s projections.
So don’t be too surprised if your favorite US stock drops next time it reports results – even if the numbers are superficially impressive.
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