It Was a Day for Good Vibes

The temps hit the mid-70s. You rocked new sunglasses and kept them on indoors for a few minutes to make sure everyone saw. And there were even a few pleasant surprises in this packed week for corporate earnings.

Who’s celebrating?

Twitter: Nothing like record daily users and climbing profits to prove a focus on healthy discourse is more important than an edit button. After weathering years of losses, Twitter (+15.64%) posted a sixth consecutive quarter of profitability ($191 million in Q1) and investors are rushing to create @jack stan accounts.

Coca-Cola: It topped forecasts on the top and bottom lines after going into Q1 with pretty gloomy expectations. Coke (+1.75%) also benefited from launching new products and diversifying away from soda.

Lockheed Martin: The largest defense contractor in the world by sales grew sales even more—by 23%. It's Lockheed's (+5.66%) biggest quarterly revenue bump in more than a decade, per the WSJ. The F-35 combat jet has been getting a ton of interest from international customers.

Honorable mention: Snap (+1.75% after hours), which beat analyst expectations across the board and added users for the first time in three quarters.

There’s a reason those beats came as a surprise

According to FactSet’s earnings shaman John Butters, experts predict S&P company earnings will shrink 3.9% in the first quarter once it’s all said and done. If that happens, it’ll be the first time the index reports a YoY decline in earnings since Q2 of 2016.

But that remains a big “if.”

• As of last week, Butters found that, of the S&P companies that had already reported Q1 results, 78% beat profit estimates. Only about 15% had opened their books so far.

Bottom line: A late 2017 tax code overhaul left corporate America flush with cash in the first quarter of last year, making for a record-breaking earnings season. This go-round won’t be quite as great...but by vaulting past expectations, earnings season has helped major indexes hit record closing highs.