With just over half of the companies in the MSCI Europe index having reported Q1 earnings thus far, the majority of results have been neutral (~3.5%) to positive (~52.5%). The Information Technology sector has generated the greatest number of positive surprises while the Energy sector has surprised by the widest margin on the upside. While growth in earnings has been positive for more Industrials, it has been below expectations and has so far resulted in the most negative surprises for any sector. The Consumer Staples sector has seen the largest positive price impact as a result of generally better than expected results.
Turning to the North American region, where nearly 90% of the constituents have reported earnings, we find the largest percentage of positive surprises (68.5%) of any MSCI World region, led by the Information Technology sector. Companies with positive earnings growth outnumber those with earnings declines by nearly five-to-one in the Utilities sector; conversely, more than half of the companies in the Materials sector reported negative earnings trends. In spite of 77% of the Health Care sector companies having beaten estimates, the impact on share prices has mostly been negative.
