Image Source: Pixabay

Here are the key points:

• Total Q4 earnings for the 83 S&P 500 members that have reported results are up +0.9% from the same period last year on +3.9% higher revenues, with 78.3% beating EPS estimates and 65.1% beating revenue estimates.
• The Q4 earnings growth pace for these 83 index members is below what we had seen from this group of companiesin other recent periods, while the 78.3% EPS beats percentage is tracking in-line with the 20-quarter average of 78.2%.
• The revenue growth pace for this group of index members represents a deceleration relative to what we had seen from the group in other recent periods, while the 65.1% revenue beats percentage is below recent periods as well as the 20-quarter average of 69.1% for this group of 83 index members.
• Looking at Q4 as a whole, combining the actual results that have come out with estimates for the still-to-come companies, total S&P 500 index earnings are currently expected to be up +0.6% from the year-earlier level on +2.3% higher revenues, which would follow the +3.8% earnings growth in 2023 Q3 on +2.0% higher revenues.

The ‘Big 7 Tech Players’ - Amazon (AMZN), Alphabet (GOOGL), Apple (AAPL), Microsoft (MSFT), Nvidia (NVDA), Meta Platforms (META), and Tesla (TSLA) - will start reporting Q4 results in the next few days. Total Q4 earnings for the group are expected to be up +38.3% from the same period last year on +12.5% higher revenues, which would follow the group’s +54.2% higher earnings on +12.9% higher revenues in 2023 Q3.

You can see the group’s earnings and revenue growth picture in the chart below.

Image Source: Zacks Investment Research

The chart below shows the group’s growth picture on an annual basis.

Image Source: Zacks Investment Research

Beyond Big Tech, Q4 earnings for the S&P 500 index are currently expected to be up +0.6% above the year-earlier period on +2.3% higher revenues. This would follow the +3.8% increase in index earnings in 2023 Q3 on +2.0% higher revenues.

The chart below shows the overall earnings picture on a quarterly basis.

Image Source: Zacks Investment Research

As you can see from these quarterly earnings-growth expectations, the growth picture is expected to steadily improve over the next few quarters.

Below, we show the overall earnings picture for the S&P 500 index on an annual basis.

Image Source: Zacks Investment Research

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. Some of that downward adjustment is already happening, as seen in the chart below.

Image Source: Zacks Investment Research

As we have noted before, full-year 2024 estimates started coming down in October, with the trend continuing in November and early December, but appear to have stabilized in recent weeks.

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