Positive: Q1 earnings show growth, with positive surprises and strong Tech sector outlook for 2024.

From Nasdaq: 2024-05-29 18:21:00

In the Q1 earnings season, S&P 500 members’ total earnings increased by +7.0% with revenues up by +4.4%. Positive surprises were seen in 78.2% of EPS estimates and 60.7% revenue estimates. ‘Magnificent 7’ earnings for 2024 Q1 rose by +51.2% with +14.0% higher revenues. Excluding this, earnings were down -1.5% for the rest of the index.

Total S&P 500 earnings are projected to grow by +9.0% this year, excluding the Tech sector’s +16.0% earnings growth. Retail sector focus was on Target, which underperformed due to weak demand for discretionary merchandise. Walmart excelled with market share gains. Earnings for the rest of the index are expected to rise by only +6.2%.

For 2024 Q2, total S&P 500 earnings are forecasted to increase by +8.8% with +4.6% higher revenues. Tech sector leads in growth, contributing significantly, while the Energy sector lags slightly. Earnings estimates have slightly decreased but still remain above initial levels at the start of the quarter.

The Tech sector continues to witness growth and optimism, credited to favorable margins outlook and increased share of higher-margin software and services. Margins are expected to exceed the record level of last year, with growth projected for the coming years. AI’s impact on sector productivity is also a key factor in this positive trend.



Read more at Nasdaq:: Taking Stock of the Current Earnings Picture