Investors feared the worst from earnings, and have got it

Profits season is living up to low expectations, with 67pc of companies reporting falling earnings and 53pc cutting dividends.

Nearly 60 per cent of companies have exceeded expectations, but expectations were low. Picture: Bloomberg

The corporate profits season has not surprised in the middle of a recession, with 67 per cent of companies reporting falling earnings and 53 per cent cutting dividends.

So far around 80 per cent of the market by value has reported and the bearish trends are clear with the market cutting estimates for both 2020 and 2021 earnings.

Normally at this stage of the profit season the last year’s numbers are revised down and the forward year up.

AMP’s Shane Oliver said amid the gloom 59 per cent of companies have outperformed expectations, which is better than 51 per cent the prior season, but then expectations were weak heading into the season.

There were also more companies pre-releasing results.

The ASX 200 index is down eight per cent this year but in the month of August is up 3.2 per cent, which reflects a positive reaction against subdued expectations.

Investors feared the worst and that’s about what they got.

The dividend cuts are higher than at any time in the last eight years, at least.

JB Hi-Fi, CarSales.com and Domino’s were among the positive surprises.