As of Jan. 26, a quarter of companies in the S&P 500 had reported their quarterly results, but those results had no significant impact on analysts’ aggregate estimates of sales revenue and earnings per share. This week the spotlight is on Alphabet, Microsoft, Amazon, Metal and Apple, which with their indicators can influence both the overall picture of the earnings season and the mood of the stock markets.
If at the start of earnings season, the consensus expected a 3.1% increase in sales revenue of S&P 500 companies in the fourth quarter compared to the same period in 2022, then by January 26, when 25% of companies had released its results results, the estimated growth rate had increased by only 0.1 percentage point to 3.2%. 68% of companies exceeded turnover expectations, which corresponds to the average result of the last five years. However, forecast revenue is exceeded by an average of 1.0%, falling below the average rate of 2.0% over the past five years.
At an earnings per share level, I entered the fourth quarter earnings season with the expectation that earnings per share of S&P 500 companies would increase 1.5% compared to the last quarter of 2022, but taking into account company expectations companies that have reported earnings so far and company expectations yet to be released, the decline in earnings per share is now estimated at -1.4%. The largest negative contribution so far has come mainly from companies in the financial sector. Sixty-nine percent of S&P 500 companies beat earnings expectations, falling below the five- and 10-year averages (77% and 74%, respectively).
In the week starting January 29, 106 companies in the S&P 500 Index will release their results. The focus falls on large technology companies, thanks to which the S&P 500 index has returned to record levels. Just as their contribution to the index performance is enormous, these companies also have a considerable impact on the aggregate indicators of revenue and earnings per share.
Excluding Tesla, whose net income fell 40% year over year to $2.49 billion in the fourth quarter, the rest of the month, namely Nvidia, Amazon.com, Meta, Alphabet, Microsoft and Apple, should be able to show a 53.7% increase in profit. Excluding these six companies, the decline in fourth-quarter earnings per share of the remaining 464 companies in the S&P 500 would have been -10.5% rather than -1.4%.
Source: Briefing.com
2024-01-30 09:32:04
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