Earnings (General News) 02 (Oct 16 - Dec 25)

[winston]

Winding down

More than 90% of the S&P 500 companies have reported Q2 earnings, and the tally so far shows year-over-year earnings growth of 10.8%, according to FactSet. That’s the best performance since Q4 2021.

Revenue grew 5.2%, about in line with the 10-year average of 5.1%.

With earnings season winding down, eyes shift more toward Q3.

For now, estimates suggest earnings and revenue will climb 5.4% and 4.9%, respectively, this quarter.

Source: The Street

[behappyalways]

It hasn't been a particularly good earnings report period for future growth expectations - with earnings downgrades outpacing upgrades since the season kicked off.
https://x.com/BobEUnlimited/status/1824494581171491274

[behappyalways]

A big difference between the Capex / R&D Spend of Mag 7 vs the rest of the market.
https://x.com/AyeshaTariq/status/1836348718200623219

[behappyalways]

U.S. corporate profits rose to a new all-time high in the second quarter
https://x.com/KevRGordon/status/1839285043270689152

[winston]

October 4, 2024

• Earnings Growth: For Q3 2024, the estimated (year-over-year) earnings growth rate for the S&P 500 is 4.2%. If 4.2% is the actual growth rate for the quarter, it will mark the 5th straight quarter of year-over-year earnings growth for the index.

• Earnings Revisions: On June 30, the estimated (year-over-year) earnings growth rate for the S&P 500 for Q3 2024 was 7.8%. Nine sectors are expected to report lower earnings today (compared to June 30) due to downward revisions to EPS estimates.

• Earnings Guidance: For Q3 2024, 60 S&P 500 companies have issued negative EPS guidance and 50 S&P 500 companies have issued positive EPS guidance.

• Valuation: The forward 12-month P/E ratio for the S&P 500 is 21.4. This P/E ratio is above the 5-year average (19.5) and above the 10-year average (18.0).

• Earnings Scorecard: For Q3 2024 (with 21 S&P 500 companies reporting actual results), 16 S&P 500 companies have reported a positive EPS surprise and 14 S&P 500 companies has reported a positive revenue surprise.

Source: Factset

https://advantage.factset.com/hubfs/Web ... 100424.pdf

[winston]

Did analysts lower EPS estimates more than normal for S&P 500 companies for the third quarter?

The answer is yes. During the third quarter, analysts lowered EPS estimates in aggregate by a larger margin compared to recent averages.

The Q3 bottom-up EPS estimate (which is an aggregation of the median EPS estimates for Q3 for all the companies in the index) declined by 3.9% (to $60.72 from $63.20) from June 30 to September 30.

The actual earnings growth rate has exceeded the estimated earnings growth rate at the end of the quarter in 37 of the past 40 quarters for the S&P 500. The only exceptions were Q1 2020, Q3 2022, and Q4 2022…

Source: Investor Place

[winston]

Five themes for traders to watch as earnings kick in

US$9 trillion 2024 rally

Strategists are predicting that companies in the S&P 500 Index will post their weakest results in the past four quarters, with just a 4.3% increase in third-quarter profits compared with a year ago.

In mid-June, projections were for an 8.4% rise, and in the second quarter growth soared to 14%.

There appears to be room for an upside earnings surprise if those reduced forecasts turn out to be overly gloomy.

Five key themes to watch as the results roll in.
> AI slows down
> Stock picker’s paradise
> All about margins
> Choppy European markets
> Election focus

Source: Bloomberg

https://www.thestar.com.my/business/bus ... gs-kick-in

[behappyalways]

Earnings revisions for Q3 have been revised down quite a bit, meaning the bar is much lower ahead of this earnings season
https://x.com/Mayhem4Markets/status/1845667918169669943


Another quarter of zero earnings growth for the S&P 493.
https://x.com/zerohedge/status/1846016328508793258

[behappyalways]

Analysts are cutting estimates on Mag 7 earnings growth for 2025 as these mega cap tech companies are seen to have a rising risk of a broader slowdown.
https://x.com/Mayhem4Markets/status/1852680060546744386

[winston]

US 2025 Earnings

With roughly 90 per cent of companies in the index having already reported, S&P 500 profits are projected to climb by 8.5 per cent through September from a year ago, double the 4.2 per cent estimate at the start of earnings season.

While profits are expected to grow for a fifth-straight quarter, analysts have marked down earnings per share (EPS) estimates for the next 12 months after executives delivered mixed outlooks or held back on offering guidance amid uncertainty over Federal Reserve interest-rates cuts, weakness in China’s economy and questions about fiscal policy in Washington.

“As we approach the beginning of the new year, you tend to see a bias to more realistic expectations”.

“Combined with Fed comments about not seeing a clear rate-cut path, the headwinds become more realistic.”

Since mid-October, analysts have lowered year-ahead projections by the most for energy and materials companies as crude prices slump. Excluding energy, which skewed estimates due to lower commodity prices and ebbing inflation, S&P 500 earnings are forecast to grow by about 11 per cent year-over-year in the third quarter.

All told, S&P 500 profit growth is forecast to climb 15 per cent annually in 2025, up from estimates of 8 per cent this year.

Source: Bloomberg

https://www.businesstimes.com.sg/compan ... rket-rally