FactSet Research Systems Inc.
11/01/2024 | News release | Distributed by Public on 11/01/2024 11:39
S&P 500 Earnings Season Update: November 1, 2024
At this stage of the Q3 earnings season, the S&P 500 is continuing to report mixed results. Overall, the index is now reporting higher earnings for Q3 relative to the end of last week and relative to the end of the quarter. On a year-over-year basis, the index is reporting earnings growth for the fifth-straight quarter.
Overall, 70% of the companies in the S&P 500 have reported actual results for Q3 2024 to date. Of these companies, 75% have reported actual EPS above estimates, which is below the 5-year average of 77% but equal to the 10-year average of 75%. In aggregate, companies are reporting earnings that are 4.6% above estimates, which is below the 5-year average of 8.5% and below the 10-year average of 6.8%. 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 EPS surprises reported by companies in the Communication Services, Health Care, Consumer Discretionary, and Industrials sectors, partially offset by negative EPS surprises reported by companies in the Information Technology sector, were the largest contributors to the increase in the overall earnings growth rate for the index over this period. Since September 30, positive EPS surprises reported by companies in the Financials, Communication Services, and Consumer Discretionary sectors, partially offset by negative EPS surprises reported by companies in the Information Technology sector, have been the largest contributors to the increase in the overall earnings growth rate for the index over this period.
As a result, the index is reporting higher earnings for the third 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 third quarter is 5.1% today, compared to an earnings growth rate of 3.6% last week and an earnings growth rate of 4.3% at the end of the third quarter (September 30).
If 5.1% is the actual growth rate for the quarter, it will mark the fifth consecutive quarter of year-over-year earnings growth for the index.
Eight of the eleven sectors are reporting year-over-year growth, led by the Communication Services and Health Care sectors. On the other hand, three sectors are reporting a year-over-year decline in earnings, led by the Energy sector.
In terms of revenues, 60% 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 1.1% above the estimates, which is 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 the Communication Services and Health Care sectors, partially offset by negative revenue surprises reported by companies in the Energy sector, were the largest contributors to the increase in the overall revenue growth rate for the index over this period. Since September 30, positive revenue surprises reported by companies in the Health Care sector, partially offset by downward revisions to revenue estimates and negative revenue surprises for companies in the Energy sector, have been the largest contributors to the increase in the overall revenue growth rate for the index over this period.
As a result, the blended revenue growth rate for the third quarter is 5.2% today, compared to a revenue growth rate of 4.9% last week and a revenue growth rate of 4.7% at the end of the third quarter (September 30).
If 5.2% is the actual revenue growth rate for the quarter, it will mark the 16th consecutive quarter of revenue growth for the index.
Nine sectors are reporting year-over-year growth in revenues, led by the Information Technology, Health Care, and Communication Services sectors. On the other hand, two sectors are reporting a year-over-year decline in revenues, led by the Energy sector.
Looking ahead, analysts expect (year-over-year) earnings growth rates of 12.7%, 13.0%, and 12.2% for Q4 2024, Q1 2025, and Q2 2025, respectively. For CY 2024, analysts are calling for (year-over-year) earnings growth of 9.3%. For CY 2025, analysts are predicting (year-over-year) earnings growth of 15.1%.
The forward 12-month P/E ratio is 21.3, which is above the 5-year average (19.6) and above the 10-year average (18.1). However, this P/E ratio is below the forward P/E ratio of 21.6 recorded at the end of the third quarter (September 30).
During the upcoming week, 103 S&P 500 companies are scheduled to report results for the third quarter.
Q3 2024: Scorecard
Q3 2024: Growth
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