Positive: Q2 earnings expected to show growth in S&P 500 and Tech sector margins highest.

From Nasdaq: 2024-06-26 17:27:00

The Q2 earnings season for 2024 is projected to show S&P 500 earnings up by +8.2% from a year ago, with a +4.6% increase in revenues. Energy sector earnings are expected to turn positive this quarter after four consecutive quarters of negative growth. The ‘Magnificent 7’ companies are expected to see earnings rise by +25.5% from last year. Excluding the ‘Mag 7’, overall S&P 500 earnings growth drops to +4.6%. Excluding the Tech sector, overall index earnings growth drops to +5.6%.

The Tech sector is anticipated to see earnings grow by +15.5% in Q2 of 2024, representing the fourth consecutive quarter of strong growth. Full-year 2024 is expected to see Tech sector earnings rise by +17.3%. Positive revisions for Tech sector earnings estimates have been ongoing, reflecting favorable momentum in the space. Major companies like Meta Platforms and Nvidia have experienced positive estimate revisions.

The upbeat earnings outlook for the Tech sector is supported by a positive margins outlook, with margins expected to exceed previous records in 2024 and continue to grow in the following years. Higher-margin software and services are contributing to this positive trend, with optimism about AI’s impact on the sector’s productivity.

In the overall earnings picture, 12 of the 16 Zacks sectors are expected to have higher margins in 2024 compared to the previous year, with notable gains in Tech, Basic Materials, Medical, and Consumer Discretionary sectors. Presidential election years have historically been strong for the market, and Zacks is offering a free special report on how to profit from the 2024 election with 5 recommended stocks.



Read more at Nasdaq: Q2 Earnings Loom: A Look Ahead