S&P 500 Earnings Season Update: May 3, 2024 (2024)

At this stage of the Q1 earnings season, S&P 500 companies continue to perform well compared to expectations. Both the percentage of S&P 500 companies reporting positive earnings surprises and the magnitude of earnings surprises are above their 10-year averages. As a result, the index is reporting higher earnings for the first quarter today relative to the end of last week and relative to the end of the quarter. On a year-over-year basis, the S&P 500 is reporting its highest earnings growth rate since Q2 2022.

Overall, 80% of the companies in the S&P 500 have reported actual results for Q1 2024 to date. Of these companies, 77% have reported actual EPS above estimates, which is equal to the 5-year average of 77% but above the 10-year average of 74%. In aggregate, companies are reporting earnings that are 7.5% above estimates, which is also below the 5-year average of 8.5% but above the 10-year average of 6.7%. Historical averages reflect actual results from all 500 companies, not the actual results from the percentage of companies that have reported through this point in time.

During the past week, positive earnings surprises reported by companies in multiple sectors (led by the Health Care and Consumer Discretionary sectors) were the largest contributors to the increase in the overall growth rate for the index over this period. Since March 31, positive earnings surprises reported by companies in the Communication Services, Financials, Industrials, Consumer Discretionary, and Information Technology sectors, partially offset by downward revisions to EPS estimates for two companies in the Health Care sector, have been the largest contributors to the increase in the earnings growth rate for the index during this period.

As a result, the index is reporting higher earnings for the first quarter today relative to the end of last week and relative to the end of the quarter. The blended (combines actual results for companies that have reported and estimated results for companies that have yet to report) earnings growth rate for the first quarter is 5.0% today, compared to an earnings growth rate of 3.5% last week and an earnings growth rate of 3.4% at the end of the first quarter (March 31).

If 5.0% is the actual growth rate for the quarter, it will mark the highest year-over-year earnings growth rate reported by the index since Q2 2022 (5.8%).

Eight of the eleven sectors are reporting year-over-year earnings growth, led by the Communication Services, Utilities, Consumer Discretionary, and Information Technology sectors. On the other hand, three sectors are reporting a year-over-year decline in earnings: Energy, Health Care, and Materials.

In terms of revenues, 61% of S&P 500 companies have reported actual revenues above estimates, which is below the 5-year average of 69% and below the 10-year average of 64%. In aggregate, companies are reporting revenues that are 0.8% above the estimates, which is also below the 5-year average of 2.0% and below the 10-year average of 1.4%. Again, historical averages reflect actual results from all 500 companies, not the actual results from the percentage of companies that have reported through this point in time.

During the past week, positive revenue surprises reported by companies in multiple sectors (led by the Financials sector), partially offset by negative revenue surprises reported by companies in a few sectors (led by the Health Care sector) were the largest contributors to the increase in the overall growth rate for the index over this period. Since March 31, positive revenue surprises reported by companies in the Financials and Health Care sectors have been the largest contributors to the increase in the revenue growth rate for the index during this period.

As a result, the index is reporting higher revenues for the first quarter today relative to the end of last week and relative to the end of the quarter. The blended revenue growth rate for the first quarter is 4.1% today, compared to a revenue growth rate of 4.0% last week and a revenue growth rate of 3.5% at the end of the first quarter (March 31).

If 4.1% is the actual revenue growth rate for the quarter, it will mark the 14^th consecutive quarter of revenue growth for the index.

Eight sectors are reporting year-over-year growth in revenues, led by the Communication Services and Information Technology sectors. On the other hand, three sectors are reporting a year-over-year decline in revenues, led by the Materials and Utilities sectors.

Looking ahead, analysts expect (year-over-year) earnings growth rates of 9.6%, 8.4%, and 17.1% for Q2 2024, Q3 2024, and Q4 2024, respectively. For CY 2024, analysts are calling for (year-over-year) earnings growth of 11.0%.

The forward 12-month P/E ratio is 19.9, which is above the 5-year average (19.1) and above the 10-year average (17.8). However, it is below the forward P/E ratio of 21.0 recorded at the end of the first quarter (March 31).

During the upcoming week, 56 S&P 500 companies (including one Dow 30 component) are scheduled to report results for the first quarter.

Q1 2024: Scorecard

Q1 2024: Growth

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