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Zacks Earnings Trends Highlights: Apple, Amazon, Microsoft, Meta and Nvidia
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For Immediate Release
Chicago, IL – March 7, 2024 – Zacks Director of Research Sheraz Mian says, "For the 338 S&P 500 members that have reported results through Friday, February 9th, total earnings and revenues are up +5.5% and +3.7% from the same period last year, respectively".
Looking Ahead to Q1 Earnings: What's Next
Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Here are the key points:
Total S&P 500 earnings for the first quarter of 2024 are expected to be up +2.4% from the same period last year on +3.5% higher revenues. This follows the +6.7% earnings growth on +3.8% higher revenues in 2023 Q4.
As was the case in the preceding two quarters, the Tech sector remains a key growth driver in 2024 Q1. Had it not been for the robust Tech sector earnings growth, total earnings for the rest of the index would be modestly in negative territory.
The 2023 Q4 earnings season has not officially ended, as 7 S&P 500 member companies have yet to report quarterly results. For the 493 index members that have already reported Q4 results, total earnings are up +6.9% from the same period last year on +3.8% higher revenues, with 75.3% beating EPS estimates and 64.1% beating revenue estimates.
For 2024 Q1, ‘Magnificent 7’ earnings are expected to increase +33.2% on +13.4% higher revenues. Excluding the Mag 7 contribution, 2024 Q1 earnings for the rest of the index would be down -3.3% from the year-earlier period (vs. +2.4% growth otherwise).
As we gear up for the March-quarter reporting cycle, whose early results will start coming out in the next few days, it is useful to summarize what we learned in the Q4 earnings season (only seven companies are still to report Q4 results at this stage).
While no major surprises emerged from the Q4 earnings season, the earnings and revenue growth pace showed modest acceleration from recent periods, and the tone and substance of management guidance remained largely favorable.
The Tech sector was a material contributor to the aggregate growth picture in Q4. The sector struggled in the post-COVID period, resuming its traditional growth-driver status just in 2023 Q3. This came after six consecutive quarters of underwhelming Tech sector earnings growth, starting in 2022 Q1 when the sector was a drag on the aggregate growth picture.
Earnings growth for the S&P 500 index would have been modestly in negative territory on an ex-Tech basis.
The ‘Magnificent 7’ stocks, including Apple (AAPL - Free Report) , Amazon (AMZN - Free Report) , Microsoft (MSFT - Free Report) , Meta (META - Free Report) and Nvidia (NVDA - Free Report) , were again significant contributors to growth in 2023 Q4. Please note that two of the ‘Mag 7’ stocks are not part of the Zacks Tech sector; these two are Amazon (part of the Zacks Retail sector) and Tesla (part of the Zacks Autos sector).
Given the expected moderation in the U.S. economy’s growth trajectory due to the cumulative effects of Fed tightening, these estimates likely need to come down. But the +4.9% revenue growth expectation is hardly aggressive, considering that 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%. Embedded in this margin expectation is the view that the inflation cycle has run its course, with easing cost pressures letting net margins return to the 2022 level.
We don’t see this margin (or revenue) outlook as unreasonable or out-of-sync with the economic ground reality.
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Earnings Trends Highlights: Apple, Amazon, Microsoft, Meta and Nvidia
For Immediate Release
Chicago, IL – March 7, 2024 – Zacks Director of Research Sheraz Mian says, "For the 338 S&P 500 members that have reported results through Friday, February 9th, total earnings and revenues are up +5.5% and +3.7% from the same period last year, respectively".
Looking Ahead to Q1 Earnings: What's Next
Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Here are the key points:
As we gear up for the March-quarter reporting cycle, whose early results will start coming out in the next few days, it is useful to summarize what we learned in the Q4 earnings season (only seven companies are still to report Q4 results at this stage).
While no major surprises emerged from the Q4 earnings season, the earnings and revenue growth pace showed modest acceleration from recent periods, and the tone and substance of management guidance remained largely favorable.
The Tech sector was a material contributor to the aggregate growth picture in Q4. The sector struggled in the post-COVID period, resuming its traditional growth-driver status just in 2023 Q3. This came after six consecutive quarters of underwhelming Tech sector earnings growth, starting in 2022 Q1 when the sector was a drag on the aggregate growth picture.
Earnings growth for the S&P 500 index would have been modestly in negative territory on an ex-Tech basis.
The ‘Magnificent 7’ stocks, including Apple (AAPL - Free Report) , Amazon (AMZN - Free Report) , Microsoft (MSFT - Free Report) , Meta (META - Free Report) and Nvidia (NVDA - Free Report) , were again significant contributors to growth in 2023 Q4. Please note that two of the ‘Mag 7’ stocks are not part of the Zacks Tech sector; these two are Amazon (part of the Zacks Retail sector) and Tesla (part of the Zacks Autos sector).
Given the expected moderation in the U.S. economy’s growth trajectory due to the cumulative effects of Fed tightening, these estimates likely need to come down. But the +4.9% revenue growth expectation is hardly aggressive, considering that 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%. Embedded in this margin expectation is the view that the inflation cycle has run its course, with easing cost pressures letting net margins return to the 2022 level.
We don’t see this margin (or revenue) outlook as unreasonable or out-of-sync with the economic ground reality.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.