Earnings Season Kicks Off: Analysts Expect 27% Growth for S&P 500 Companies

Strategic Insights -

As earnings season begins, companies such as Alcoa, Intel Corp, General Electric Co, and Google Inc, are set to report their second-quarter results. Despite expectations of a strong 27% year-over-year growth for S&P 500 companies, the sector faces tough comparisons, as earnings growth for the index was 58% in the previous quarter. Companies had benefited from extensive cost-cutting measures and easy comparisons in the March quarter, but have struggled with currency fluctuations and cautious consumer spending.

Key Takeaways:

  • Analysts expect earnings for S&P 500 companies to increase 27% year-over-year.
  • The information technology, materials, and energy sectors are likely to report the highest growth rates for the quarter.
  • Companies have struggled with currency fluctuations and cautious spending by consumers, making comparisons difficult.
  • Paul Larson, equities strategist at Morningstar, notes that companies are already unwinding belt-tightening measures and warns of tough comparisons.
  • 35% to 40% of the S&P 500's earnings are generated outside the U.S.

Statistics:

  • Analysts expect 27% year-over-year growth in earnings for S&P 500 companies.
  • Earnings growth for the S&P 500 index was 58% in the previous quarter.
  • 35% to 40% of the S&P 500's earnings are generated outside the U.S.
  • Companies face tough comparisons due to extensive cost-cutting measures and easy comparisons in the March quarter.
  • Currency fluctuations and cautious consumer spending have impacted company performance.

Sources:

  • Euclid Infotech Pvt. Ltd.
  • Morningstar
  • Albawaba.com