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Kelly Evans: Earnings season matters again

CNBC's Kelly Evans
CNBC

Remember all those debates over getting rid of quarterly guidance--and even quarterly results?  

This earnings season is a reminder that they do offer useful information to investors. 

Have you seen shares of Pinterest today?? They're up 30%! This after their earnings this morning showed active users surged nearly 40% in the second quarter from a year earlier.  

Yesterday, At Home surged 45% after blowing past earnings expectations, and even staid old UPS saw its shares surge 14%--the most since 1999--after a stronger-than-expected report. Qualcomm was up a similar amount for the same reason. Crocs had a huge session. The list goes on. 

Even Big Tech is in on the action today, with shares of Facebook up more than 8%, Apple--which is also splitting its stock again--up more than 6%, and Amazon up more than 4% after surprisingly strong results last night. (Google is the rare exception, with shares slumping 4%). 

I asked the Crocs CEO why analysts were caught so off-guard by their strong results, and he said "well, we didn't guide this quarter--no companies could really guide this quarter," because of the pandemic, so the street was left groping around in the dark. 

For the most part, analysts have been too pessimistic--in tech's case, way too pessimistic. Eighty percent of companies so far (we're halfway through earnings season) have beaten estimates, according to Bob Pisani. That's about 10 points higher than usual. And the average beat is a whopping 13%, compared with the 3% norm. 

Now, it may well be the case, as the Business Roundtable has argued, that quarterly guidance makes corporate America too short-term focused. The practice may yet fade away.  

But this quarter is a reminder of just how much investors still rely on companies to tell them how business is going. While it's much more exciting to cover these wild stock swings we're seeing as a result, I'm not convinced that, going forward, less is more.  

See you at 1 p.m!

Kelly

Twitter: @KellyCNBC

Instagram: @realkellyevans