Strong first-quarter earnings beat expectations: FactSet

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S&P 500 companies beat earnings expectations for the first quarter of 2024, with both the proportion of companies reporting positive surprises and the magnitude of those surprises higher than the multiyear average, according to a FactSet report.

80% of S&P 500 companies reported first-quarter results, and 77% beat earnings per share (EPS) estimates, in line with the five-year average and above the 10-year average.

In total, the companies reported earnings that were 7.5% higher than expected and above the 10-year average.

Eight of the S&P 500’s 11 sectors reported year-over-year profit increases, led by communications services, utilities, consumer products, and information technology. However, the energy, healthcare, and materials sectors have seen year-over-year revenue declines.

On the revenue side, 61% of companies reported actual revenue that was higher than expected, but this number is below the five-year and 10-year averages. The mixed revenue growth rate for the first quarter is now 4.1%, marking his 14th consecutive quarter of revenue growth for the index.

Looking ahead, analysts expect continued earnings growth for the remainder of 2024, with growth expected to be 9.6%, 8.4%, and 17.1% in the second, third, and fourth quarters, respectively. I am. The S&P 500’s trailing 12-month P/E ratio is 19.9x, which is above its 5-year and 10-year averages.

“At this stage of the first-quarter earnings season, S&P 500 companies continue to perform better than expected,” FactSet said. “Both the proportion of S&P 500 companies reporting positive unexpected earnings and the magnitude of unexpected earnings are above the 10-year average.”

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