Bank Of America Recaps Earnings Season Thus Far

In a note to clients on Monday, Savita Subramanian of Bank of America stated that at the conclusion of last week's trading session, 443 S&P 500 companies reported earnings. Fifty-seven percent of companies thus far have beaten earnings per share expectations, 56 percent reported higher-than-expected sales and 38 percent have beaten on both fronts.

According to Subramanian, nearly two-thirds of companies with at least 30 percent of sales stemming from international markets have beaten analysts' expectations.

Last week, many utilities companies reported earnings, with the majority missing expectations or reporting in-line expectations. This dampened the proportion of positive surprises for the S&P 500 since the beginning of earnings season, according to the analyst.

“Expectations for multinationals have been slashed amid a stronger dollar, weaker oil prices, and fears about global growth,” Subramanian wrote. “In contrast, just 43% of purely domestic stocks have beaten on EPS. We think the worst estimate cuts may be behind us, given that recent macro data and BofAML global models point to stabilizing or improving global growth.”

Based on the analyst's calculations, companies that beat on both the top and bottom line have outperformed the S&P 500 by 1.2 percent in the trading day following earnings. Companies that missed on both the top and bottom lines underperformed the index by 2.1 percent. The spread of 3.3 percent falls below the average spread of 4.0 percent, but higher than the 2.0 percent seen during the second quarter.