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Are You Worried About Weak Revenues?

Todd Bunton

First quarter earnings season is well underway, and in terms of earnings beats, things look fine. According to Zacks Director of Research Sheraz Mian in his daily Ahead of Wall Street piece, about two-third of companies have reported positive earnings surprises this quarter, which is in-line with a typical healthy earnings season.

However, things are not so favorable when it comes to revenues. Only about one-in-three companies have beaten revenue expectations, which is well below normal. Perhaps more troubling, overall revenues are down -0.7% year-over-year in Q1.

Certainly some of this weakness can be attributed to a strong U.S. dollar, since a little less than half of all revenue on the S&P 500 comes from overseas. But global economic weakness is also to blame.

It's also worth noting that companies have been known to massage their EPS numbers to beat the Street, but revenue is more difficult for management to manipulate (just sayin').

So how concerned are you about weak revenues this quarter? And what implications do you think this has for earnings in future quarters?

Chime in below.

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