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Outperforming sales estimates a new trend

Companies have found a new way to surprise analysts: They're selling more stuff.

Three out of four companies in the S&P index that have reported earnings this quarter have beat sales predictions by Wall Street analysts. And some companies aren't just merely squeaking in ahead of expectations. Fifteen percent of companies that beat estimates did so by at least 10 percent, according to Standard & Poor's.

More companies are beating sales predictions than at any other point since the recession ended in June 2009. This surprise comes on top of eight straight quarters of beating analysts' profit forecasts.

Analysts often underestimate profits when companies cut costs in ways that aren't easy to gauge from the outside. But those same experts rarely make mistakes with revenue projections. That's because many analysts have developed highly reliable, fine-tuned systems to estimate sales, ranging from counting cars in a parking lot to complex mathematical models. Why were so many experts wrong?

Analysts worried high gas prices, uprisings in the Middle East and Libya and fallout from the earthquake in Japan would result in lower business and consumer spending. Instead, consumers are spending more on everything from airfare to oranges. -- AP

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