In the upcoming second quarter, S&P 500 earnings are expected to rise by +8.2% compared to the same period last year, with revenues also increasing by +4.6%. This marks the highest level of earnings growth seen since the first quarter of 2022. The energy sector, after seeing four consecutive quarters of negative growth, is expected to turn positive in this quarter.
The top seven companies in the index are projected to show a substantial earnings growth of +25.5% and revenue growth of +13.1%. Excluding these companies, the rest of the index is expected to see earnings growth of +4.6%. The technology sector is leading the way with a growth rate of +15.5%, contributing significantly to the overall market gains.
The positive trend in earnings revisions, especially in the technology sector, is driving the overall favorable outlook for earnings. Companies like Metaplatforms and Nvidia are seeing significant positive estimate revisions, leading to a positive momentum in the sector. The expectation is for continued strong earnings growth in the technology sector, with margins also expected to exceed previous records.
Overall, the earnings picture for 2024 looks promising, with technology, basic materials, medical, and consumer discretionary sectors expected to have higher margins. The revenue growth rate is improving, with about half of the earnings growth coming from revenue growth, and the rest from margin gains.
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Overall, the outlook for earnings in the second quarter and beyond is positive, driven by strong performance in key sectors like technology and expected margin improvements across various industries.
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https://finance.yahoo.com/news/zacks-earnings-trends-highlights-meta-092900086.html
