Q1 Earnings; The Devil Is in the Details

On financial websites, you may read, "First-quarter corporate reports were better than expected.” And that’s true. So far, 73% of Standard & Poor’s 500 companies have reported actual Q4 earnings per share above estimated earnings per share.¹

But the devil is in the details.

In Q4 2023, total S&P 500 earnings are projected to increase by almost $35 billion, or 7.4% from a year earlier. But let’s pull back the curtain and see what companies contributed the most and the least to that overall total.²

• The top 15 companies are projected to generate $61 billion in earnings, led by Nvidia ($10.6 billion) and Amazon ($10.3 billion). On a Y-over-Y basis, the top 15 will see earnings increase by 78%.²
• The middle 470 are expected to contribute $8.5 billion. Y-over-Y, a 2.6% increase on average.²
• The bottom 15 companies are projected to lose $35 billion, led by Pfizer (-$6.0 billion) and Citibank (-$4.2 billion). On a Y-over-Y basis, the bottom 15’s earnings will decline by 46.8%.²

What does it all mean?

It’s a cautionary tale about the dangers of watching headlines—they summarize the key points but may overlook important details. It's during these times that Wealth Advisory Lab can partner with you to ensure the strategies you have in place are aligned with both your personal and business goals.

^{1. Insight.FactSet.com, February 16, 2024. “S&P 500 Earnings Season Update: February 16, 2024.” 395 companies in the S&P 500 have reported results as of February 16.}

^{2. Fundstrat.com, February 26, 2024}