(Bloomberg News) U.S. companies from Apple Inc. to 3M Co. are surpassing earnings estimates at the highest rate in two years as economic growth at home helps drive demand and counter a drag from Europe.
Profit has outpaced forecasts for 82 percent of Standard & Poor's 500 Index companies that have reported in the earnings cycle, which if it holds would be the highest rate since 2010's first quarter. The 12 percent average jump before today topped the 0.6 percent gain analysts projected when reporting began in earnest on April 10, according to data compiled by Bloomberg.
"The domestic economy is faring far better than people thought and that, even in the face of Europe and the slowdown in the emerging world, is blowing away estimates," said Jim Paulsen, chief investment strategist for Well Capital Management, which oversees about $333 billion.
Profits running ahead of forecasts may help ease investor concern that a shrinking economy in Europe and slower growth in China will weigh down earnings this year.
Eaton Corp., the Cleveland-based producer of circuit breakers and truck parts, beat earnings projections as construction and vehicle sales rebounded, said Chief Executive Officer Sandy Cutler in an interview.
"What we've seen is a pretty good snapback," Cutler said, referring to U.S. economic growth since the financial crisis of 2008. "The industrial side of the economy had a very difficult downturn."
All 10 industry groups in the S&P 500 delivered better- than-forecast results, with financial, materials and technology companies leading with a positive rate of more than 11 percent, according to data compiled by Bloomberg. So far about 168 companies have reported earnings.
Boeing Co., Corning Inc. and Sprint Nextel Corp. all reported results that beat analysts' estimates today. Chicago- based Boeing, the world's biggest aerospace company, delivered more commercial jets while pushing production to record levels. First-quarter earnings rose to $1.22 a share, excluding some items, Boeing said, exceeding the average prediction by 29 cents.
Apple, the world's largest company by market value, helped drive the earnings growth rate for S&P companies that have reported to 12 percent yesterday from 6.5 percent the previous day. The company yesterday said its fiscal second-quarter profit almost doubled to $11.6 billion, reflecting demand for the iPhone in China and purchases of a new version of the iPad. Earnings per share outstripped estimates by 23 percent.
Among other technology bellwethers, Microsoft Corp., the largest software maker, last week reported higher-than-expected corporate purchases of computers, while Texas Instruments Inc., the biggest maker of analog chips, earlier this week indicated robust demand for a range of electronics.