From Nasdaq:

Q4 earnings are on the rise for S&P 500 members with over 86% of companies exceeding EPS estimates. However, the percentage of companies beating revenue estimates is at a 20-quarter low. In the Technology sector, Q4 earnings are up, while for the rest of the index they would be down if not for strong tech sector contributions. Technology stock earnings are notable, especially with Citigroup beating EPS and revenue estimates. Conversely, JPMorgan and Bank of America are trending towards easily beating EPS, but coming up short on top-line estimates. The Q4 performance analysis shows that revenue growth is decelerating, while the revenue beats percentage is lower than in previous quarters. Despite strong Tech sector contributions, overall earnings growth is expected to improve gradually over the next few quarters, while the U.S. economy’s growth trajectory and Fed tightening are expected to require a downward earnings adjustment. The full-year 2024 estimates have already started to decrease, suggesting stabilization with the potential for upcoming adjustments. Despite positive Q4 earnings results, the revenue trend is showing weakness, possibly indicating disinflation at work. The disparity between rising earnings and lagging revenue performance is concerning, given that earnings growth is comparable to previous quarters, yet revenue growth pace represents a deceleration in overall company performance. This suggests a nuanced picture, where Citigroup outperforms but others lag, and a trend that is too early to call. To read more about this topic, please visit Zacks.com.



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