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Here's what today's earnings misses mean

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Earnings and revenue misses: Is this the start of a trend? It was not a great morning for earnings.

Consider: New York Times (NYT) missed as ad revenues dropped; UPS (UPS) missed on earnings and lowered 2014 guidance; Eaton (ETN) missed and lowered the high end of its 2014 guidance; Corning (GLW) missed; and Eastman Chemical (EMN) missed on revenues.

All are trading down notably mid-afternoon.

Is this the start of a trend? I don't think so. True, there have been a few other high-profile misses, notably Whirlpool (WHR), Amazon (AMZN), Mattell (MAT), and DR Horton (DHI), but they are outliers.

With 262 companies reporting (52 percent of the S&P 500), 68 percent of those reporting are beating expectations (above the long-term average of 64 percent), and both earnings and revenues have been improving since the beginning of the quarter:

  • Earnings: +8.4%
  • Revenues: +4.9%

Source: S&P Capital IQ

8.4 percent earnings growth is the highest since Q3 2011!

What matters most to the stock market, however, is not reported earnings, it's guidance. And it's been better! 55 companies in the S&P 500 have provided guidance for Q3: 29 are negative, 14 positive and 12 in line. That is a ratio of 2-to-1 negative-to-positive announcements, a significant improvement of the Q2 guidance of 8-to-1 negative-to-positive announcements.

  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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