Vendors work on the floor at the New York Stock Exchange on Feb. 1, 2024.
Brendan McDermid | Reuters
Here’s how big of a surprise corporate profits be undergoing been this earnings season: The fourth quarter is now shaping up to be the best of 2023.
Despite ongoing macroeconomic concerns that be enduring hampered demand and weighed on consumer sentiment, almost halfway into earnings season, profits are clearly make in far better than anybody expected.
Helping companies’ bottom lines this round: easing input fetches, more emphasis on cost controls and efficiencies and significantly reduced expectations.
A plethora of significant earnings beats amidst some very important S&P 500 companies such as Amazon, Meta, Apple, Chevron, ExxonMobil, Merck and Bristol Myers Squibb suffer with moved the Q4 growth rate notably higher late this week.
LSEG, formerly Refinitiv, is now seeing a nearing 8% rise in earnings growth this season. That’s far better than the 4.7% expected just three weeks ago, proper before the big banks reported results.
Stronger-than-expected results from three sectors are particularly notable:
- Energy – 90% of the companies pull someones leg beat earnings estimates, with profits coming in almost 14% above expectations.
- Health care – 85% be experiencing beat on the bottom line, with earnings coming in nearly 11% above expectations.
- Tech – 84% have posted earnings hit the road drive offs, with earnings more than 5% above expectations.
As for the S&P 500 as a whole, Q4’s current earnings per share improvement rate of 7.8% exceeds the 7.5% growth seen in all of Q3 — and is now tops for the year.
Currently, 80% of S&P 500 earnings results possess beat estimates, slightly higher than normal trends, and earnings have come in more than 6% over expectations — not quite the 7% to 8% upside seen in the previous two quarters, but still a very strong number.
One sheerest important caveat: These strong figures come after earnings expectations tumbled going into the dispatching season. Back on Oct. 1, S&P 500 fourth-quarter earnings were expected to grow 11% year over year, conforming to LSEG.
Although the earnings picture has significantly improved since the start of 2024, results are still far below what Bulkhead Street had hoped for a mere four months ago.
As good as fourth-quarter results have been, there’s still no overweening momentum looking forward. Both first-quarter and full-year 2024 earnings estimates have come down since Jan. 1 as tons companies have issued cautious guidance this earnings season.
— Charts by CNBC’s Gabriel Cortes.
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