From Nasdaq, Inc.:

Total Q4 earnings for the 369 S&P 500 members are up +5.8% from last year with 79.1% beating EPS estimates and 64.8% beating revenue estimates. Excluding the ‘Magnificent 7,’ total earnings for the rest of the index would down -2.9% on +1.8% higher revenues. The Mag 7 companies combined account for 22.8% of all S&P 500 earnings in Q4.

Tech sector’s strong growth helped keep the Q4 earnings growth pace in the positive, even though excluding the Mag 7, total earnings for the rest of the index would be down -2.9% on +1.8% higher revenues. The Mag 7 companies account for 22.8% of all S&P 500 earnings in Q4.

The Magnificent 7 companies – including Apple, Amazon, Microsoft, Alphabet, and Tesla – are on track to increase +48.7% earnings and +14.5% revenues for Q4. Together, they expect to account for 22.8% of all S&P 500 earnings in Q4.

The Magnificent 7 companies are expected to achieve +30.4% more earnings in 2024 Q1 on +12.8% higher revenues. The group’s earnings outlook continues to improve, as the revisions trend for the broader Tech sector also remains positive.

Q4 earnings for the S&P 500 index are currently expected to be up +5.5% above the year-earlier period on +3.2% higher revenues. The expected revenue growth is +4.7%, which is not too aggressive considering the U.S. economy produced a nominal GDP growth rate in excess of +6% last year.

The rest of the 2024 earnings growth is coming from margin expansion, with 2024 net margins for the index going up to +12.4% from last year’s 11.7%. The margin outlook is not unreasonable, considering the economic ground reality.



Read more: Q4 Results Paint a Positive Earnings Picture