Q2 earnings for S&P 500 beat expectations, but lower revenue beats; overall positive.

From Nasdaq: 2024-07-24 19:09:00

In Q2, 134 S&P 500 companies reported +7.6% earnings growth and +4.7% revenue growth, with 81.3% beating EPS estimates and 57.5% beating revenue estimates.

Despite revenue beats, the 57.5% rate was the lowest for the group in 20 quarters. Overall, Q2 earnings for the S&P 500 are expected to grow +9.6%.

Alphabet and Tesla kicked off Q2 on a lower note, with Tesla’s earnings down -45.3% on higher revenues. Alphabet beat estimates, but market reaction was tepid due to high capital spending levels.

For the Tech sector, Q2 earnings are expected to be up +16.3% overall. The sector is expected to contribute nearly 30% of all S&P 500 earnings over the next four quarters.

Tech sector earnings for 2024 are expected to grow +17.2%, driven by strong margins outlook. Tech sector margins are at record highs and expected to increase further due to investments in higher-margin software and services.

In 2024, 11 of the 16 Zacks sectors are forecasted to have higher margins. Tech, Finance, and Consumer Discretionary sectors are expected to see the biggest margin gains.

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