Looking at earnings season
Earning Season Update — 589 Companies reported their quarterly results from 11
April to date, with 54.5% missing consensus forecasts. This transforms into an
aggregate earnings surprise of negative US$16.34bn across Japan, which
translates into the largest earnings miss since the global financial crisis.
Surprise Distribution — The distribution of earnings surprises reported to date is
negatively skewed, with median negative surprise of -6.04% (See Fig 7). Looking at
the tails, 53 companies reported earnings worse than -150% of forecast as
compared to the 43 companies that reported better than 150% surprise. (See Fig 6)
Pre-announcement drift — The pre-announcement spread between Quintile 1 and
5 was about 4% 29 days before reporting date, providing further evidence that the
pre-earnings announcement drift continues to exist in Japan.
Sector Hits and Misses — On an aggregate basis, the sector with the largest
negative surprise is the Consumer Staples sector, which missed consensus by US$-
8.08bn. At the other end, Industrials sector is the only sector which beat earning
estimates, by a margin of US$1.1bn (See Fig 1 and 5).
Sector Breakdown by Quarter
Surprise Distribution and Quintile Performance for 2011 Q1