Earnings (General News) 03 (Jan 24 - Dec 27)

[winston]

Profitable quarter

The fourth-quarter earnings season is winding to a close, with Walmart slated to report on Thursday and Nvidia on deck for next week, and investors have been quietly surprised by the overall results.

With around 383 companies in the S&P 500 reporting for the December quarter so far, collective earnings are forecast to rise 15.3% from a year earlier to $546.3 billion, a $30 billion improvement from early forecasts.

LSEG data, meanwhile, peg first-quarter profit growth at 8.5%, with a collective tally of $511.3 billion.

Source: The Street

[winston]

4Q Earnings

About 80% of companies in the S&P 500 have reported earnings so far this season.

More than 75% have beaten Wall Street’s profit estimates, meaning they made more money last quarter than analysts expected.

Meanwhile, the blended earnings growth rate is nearly 17%, which marks the index’s highest profit growth rate since 2021.

More importantly, trends are expected to stay strong for the foreseeable future.

That is, next quarter, earnings are projected to rise about 8%, then another 9% in Q2. They are expected to rise almost 15% in the third quarter and about 13% in the fourth.

Source: Investor Place

[behappyalways]

Big surprise... the number of companies citing tariffs on earnings calls has gone way, way up.
https://x.com/AyeshaTariq/status/1898112330107662771

[winston]

Forward Earnings

For Q2 2025 through Q4 2025, analysts are calling for earnings growth rates of 9.7%, 12.1%, and 11.6%, respectively.

For CY 2025, analysts are predicting (year-over-year) earnings growth of 11.6%.

It’s going to be very hard to have a deep, sustained bear market with that kind of earnings growth.

Through Document Search, FactSet searched for the term “recession” in the conference call transcripts of all the S&P 500 companies that conducted earnings conference calls from December 15 through March 6.

Of these companies, 13 cited the term “recession” during their earnings calls for the fourth quarter.

This number is well below the 5-year average of 80 and the 10-year average of 60.

In fact, this quarter marks the lowest number of S&P 500 companies citing “recession” on earnings calls for a quarter since Q1 2018.

Source: Factset

[behappyalways]

There are a few positives... but the chart seems to be largely skewed towards the negative
https://x.com/AyeshaTariq/status/1905712056894193835

[behappyalways]

Mag 7 stocks generate 49% of revenue overseas. That could hurt a bit given the retaliatory measures that are likely to be coming...
https://x.com/Mayhem4Markets/status/1908197353380597895

[winston]

1Q Earnings

For the first quarter, analysts now see earnings growth of 6.7% for S&P 500 companies, down from about 11.1% in early November when Trump was elected.

For all of 2025, they see profits rising 9.4%, compared with a projection of 12.5% at the beginning of the year.

Source: Bloomberg

[winston]

Wall Street has a far bigger problem: Earnings quality

Earnings quality is a serious issue considering the stock market entered 2025 at its third-priciest valuation when back-tested 154 years.

The S&P 500’s Shiller price-to-earnings (P/E) Ratio, which you may also see referred to as the cyclically adjusted P/E Ratio (CAPE Ratio), almost hit 39 in December 2024.

For context, the average Shiller P/E Ratio since January 1871 is 17.23.

Source: Daily Trade Alert

https://dailytradealert.com/2025/05/01/ ... r-problem/

[winston]

1Q Results

According to FactSet, 72% of S&P 500 companies have released quarterly results.

Of those, 76% have exceeded analysts’ earnings expectations.

The average earnings surprise is 8.6% and the S&P 500 is expected to achieve 12.8% earnings growth for the quarter.

Source: Investor Place

[winston]

US corporate profits decrease sharply in first quarter

Profits from current production with inventory valuation and capital consumption adjustments dropped US$118.1 billion (HK$921.18 billion) last quarter.

Profits surged US$204.7 billion in the October-December quarter.

Companies ranging from airlines, retailers to motor vehicle manufacturers have either withdrawn or refrained from giving financial guidance for 2025,

Source: The Standard

https://www.thestandard.com.hk/wealth-a ... le/303616/