Solid Q1 Earnings Exceed Expectations: FactSet
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S&P 500 companies are surpassing earnings expectations for the first quarter of 2024, with both the percentage of companies reporting positive surprises and the magnitude of those surprises exceeding multi-year averages, according to a report by FactSet.
With 80% of S&P 500 companies having reported Q1 results, 77% have exceeded earnings per share (EPS) estimates, matching the five-year average and surpassing the 10-year average.
In aggregate, companies are reporting earnings that are 7.5% above estimates, outperforming the 10-year average.
Eight of the eleven S&P 500 sectors are reporting year-over-year earnings growth, led by Communication Services, Utilities, Consumer Discretionary, and Information Technology. However, the Energy, Health Care, and Materials sectors are experiencing year-over-year declines in earnings.
On the revenue front, 61% of companies have reported actual revenues above estimates, although this figure falls below both the five-year and 10-year averages. The blended revenue growth rate for Q1 is currently at 4.1%, marking the 14th consecutive quarter of revenue growth for the index.
Looking ahead, analysts anticipate continued earnings growth for the remainder of 2024, with projected growth rates of 9.6%, 8.4%, and 17.1% for Q2, Q3, and Q4, respectively. The forward 12-month P/E ratio for the S&P 500 stands at 19.9, above both the five-year and ten-year averages.
"At this stage of the Q1 earnings season, S&P 500 companies continue to perform well compared to expectations," says FactSet. "Both the percentage of S&P 500 companies reporting positive earnings surprises and the magnitude of earnings surprises are above their 10-year averages."
