Image Source: Pixabay

• For 2024 Q4, total S&P 500 earnings are currently expected to be up +7.4% from the same period last year on +4.8% higher revenues.
• Q4 earnings growth improves to +9.6% once the Energy sector’s drag is removed from the aggregate numbers, but the growth pace drops to +3.8% once the Tech sector’s substantial contribution is excluded.
• Estimates for the period came down since the quarter got underway, but the magnitude of revisions compares favorably to what we had seen in the comparable period of the preceding period.
• All 16 Zacks sectors are expected to enjoy positive earnings growth in 2025, with nine expected to have double-digit earnings growth. These include Aerospace (+60.6%), Consumer Discretionary (+26.4%), Medical (+22.8%), Tech (+16.9%), Basic Materials (+14.6%), Retail (+10.6%), Business Services (+11.6%), Conglomerates (+11.1%), and Transportation (+15.1%).

Tech Driving Earnings Growth 
 

The Tech sector has been a significant growth driver in recent quarters, and the trend is expected to continue in 2024 Q4 and beyond. For Q4, Tech sector earnings are expected to be up +14.9% from the same period last year on +10.4% higher revenues, the 6^th quarter in a row of double-digit earnings growth.

This would follow the sector’s +22.6% earnings growth on +11% higher revenues in 2024 Q3. As the chart below shows, the sector’s growth trajectory is expected to continue in the coming quarters.

Image Source: Zacks Investment Research

In addition to the Tech sector’s strong growth profile, the sector is also among the few sectors whose earnings outlook is steadily improving. This shows up in the revisions trend for the Tech sector for both Q4 and full year 2025.

Take the examples of Nvidia (NVDA - Free Report) and Meta Platforms (META - Free Report). The current Q4 Zacks Consensus EPS estimate for Nvidia of 84 cents is up from 78 cents two months back. The same consensus EPS estimate for Meta of $6.76 has increased +7.1% over the last two months.

The Earnings Big Picture 
 

The chart below shows expectations for 2024 Q4 in the context of what was actually achieved in the preceding four periods and what is currently expected for the next three quarters.

Image Source: Zacks Investment Research

The chart below shows the overall earnings picture on an annual basis.

Image Source: Zacks Investment Research

As you can see, the expectation is for double-digit earnings growth in each of the next two years, with the number of sectors enjoying strong growth notably expanding from the narrow base we have been seeing lately.

Tech sector earnings are expected to be up +16.9% in 2025, which would follow the sector’s +20.0% earnings growth in 2024. But even excluding the Tech earnings, S&P 500 earnings would be up +12.3% in 2025, with nine of the 16 Zacks sectors expected to enjoy double-digit earnings growth.

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