Morgan Stanley's Smart Comments on Earnings Season to Date.

FT Alphaville delivers the goods:

After a flurry of first-quarter US corporate results figures, analysts have been pronouncing the Q1 earnings-per-share season “solid”.
But, as Morgan Stanley says in a recent note, margin expectations may be too high. It begins:

Over 300 companies, representing 70% of the S&P 500′s market capitalization, have reported Q1 earnings. Earnings to date have been 6.7% ahead of the consensus expectations, with materials and technology performing well, and staples and energy relatively weaker. For the 2nd straight quarter weak loan growth from banks was a key EPS season summary point. S&P revenues are pacing 1.3% above consensus, indicating that companies controlled costs in Q1 at a surprising rate. We conclude that the lag between rising commodities and P&Ls is more than six months.

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