Corporate America may have overplayed its hand when it comes to the earnings game.
With the first-quarter earnings season almost completely on the books, one of the biggest stories aside from the 7.1 percent decline in profits was that investors were less impressed than usual with companies that beat expectations. They have also been giving a harder time to companies that missed analyst estimates.
Taken together, the reporting season tells a story of investors both getting savvier about the collective lowering of the earnings bar, and growing more leery of market valuations.
"Companies have been very negative on their own earnings when they're giving guidance," said Greg Harrison, a research analyst at Thomson Reuters. "They've been really trying to push the bar down."
That bar went so low that it was pretty easy for most companies to clear it. With 87 percent of the S&P 500 reporting, 71 percent topped expectations for bottom-line profit, with 53 percent beating on the top-line revenue side, according to FactSet.