Hurdling Overseas Earnings
Overseas earnings were even better than expected during the first quarter (Q1)
of 2017. Global equity analysts were looking for strong earnings growth from overseas
companies after years of flat to declining earnings; for the most part, those markets
delivered. Stock markets themselves responded, with international markets generally
outperforming the S&P 500 Index. Frequently after earnings are released, analysts
may reduce future growth expectations, often based on conservative comments
from companies as they manage expectations. However, earnings expectations only
decreased modestly during this period, and actually increased further for some regions.
It is great to see continued optimism on corporate fundamentals, but it could prove
challenging for companies to outpace expectations again.
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