Roughly two thirds of companies in the S&P 500 have exceeded analysts' estimates on earnings per share dating back to the first quarter of 2004 -- a signal that companies have become more conservative on their earnings guidance.

Based on a study by financial consultancy Parson Consulting, since the passage of Sarbanes-Oxley nearly one in four companies has exceeded analyst expectations by more than 10 percent.

Specifically, SOX mandated a shortened time frame in which companies must report quarterly and annual earnings to the SEC.

By contrast, the percentage of companies that have missed their projected EPS by more than 10 percent averaged about 7.4 percent, with 8 percent missing the mark in the second quarter of 2005.

For the study, Parson examined public data for all of the available quarterly results of S&P 500 companies as of August 2005. Specifically, Parson focused on differences between EPS consensus estimates and actual results.

"This study indicates that companies may be very conservative when projecting their earnings causing them to under-promise and over-deliver," said Toni Hicks, senior vice president of practices at Parson Consulting, in a statement. "Financial executives could be submitting lower expectations, through this conservatism that will result in them to easily beat their projected earnings."

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