Spencer Platt
While the Q1 2024 earnings season is still underway, profit growth for S&P 500 (SP500) companies is collectively on course to be the strongest in more than two years.
UBS in tracking corporate financial reports found Q1 earnings were beating estimates by 8.3% in aggregate. That rate of earnings surprises was the highest since Q3 2021 when it was 9.7%, according to Tuesday's research note.
The latest surprise rate was driven by 72% of companies topping projections, with just about 17% of the S&P 500's roughly $44T market cap having reported.
"EPS is on pace for 9.3%, assuming the historical beat rate of 4.8% for the rest of this season," Jonathan Golub, chief U.S. equity strategist at UBS, said in the research note Tuesday.
Meta Platforms (META) -- one of the so-called Magnificent 7 group of Big Tech companies, late Wednesday became one of latest companies to turn in Q1 profit above Wall Street's targets. Ahead of the Facebook parent, S&P 500 (SP500) constituents AT&T (T), General Motors (GM), and Texas Instruments (TXN) posted Q1 earnings that surpassed expectations.
Per-share earnings were expected to rise by 5.3% in Q1, UBS said. The Tech+ sector, which includes internet retail companies, looks set for a nearly 30% profit climb. The health care and energy and materials sectors, however, lagged all others, with the latter facing a roughly 25% earnings decline.
Q1 revenue was expected to increase by 3.1%. The Q1 deluge of reports continues Thursday with Microsoft (MSFT) and Alphabet (GOOG).
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