Yahoo Finance Apple, Amazon, Nvidia and Tesla are part of Zacks Earnings Preview
For Immediate Release
Chicago, IL – May 6, 2024 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Apple AAPL, Amazon AMZN, Nvidia NVDA and Tesla TSLA.
Mag 7 Leadership Reflects Earnings Power
With Q1 results from Apple and Amazon now out, we only have Nvidia’s results still awaited at this stage of the ‘Magnificent 7’ group of companies. The sub-par growth numbers from Tesla and Apple notwithstanding, the Mag 7 group as a whole showed impressive top- and bottom-line growth numbers.
In fact, had it not been for the substantial earnings contribution from the Mag 7, Q1 earnings growth for the rest of the S&P 500 index would be in negative territory.
It is interesting to note here that the market reaction to the Tesla and Apple releases has thus far been the best of the group. This may look odd since Tesla’s Q1 earnings were down -53.4% from the year-earlier level on -8.7% lower revenues, and Apple’s earnings and revenue growth rates were -2.2% and -4.3%, respectively. But it isn’t surprising as both companies’ results proved better than what market participants had feared. We also need to keep in mind the impact of Apple’s blockbuster buyback announcement, the largest ever in history.
Using estimates for Nvidia, which will be coming out with its March-quarter results on May 22nd, and actual results for the other six members of the group, total Q1 earnings for the group are expected to be up +49% from the same period last year on +13.6% higher revenues.
Please note that the Mag 7 companies currently account for 29.9% of the S&P 500 index’s total market capitalization and are expected to bring in 21.2% of the index’s total earnings in 2024. For 2024 Q1, the Mag 7 group is on track to bring in 22.1% of all S&P 500 earnings.
Given their enormous earnings power and growth profile, it is hard to argue with the group’s market leadership.
Beyond these mega-cap players, total Q1 earnings for the Technology sector as a whole are expected to be up +28.2% from the same period last year on +8.9% higher revenues.
Earnings Season Scorecard and This Week’s Earnings Reports
We remain in the heart of the Q1 earnings season this week, with more than 1200 companies reporting results, including 54 S&P 500 members. This week’s notable reports include Disney, Uber, Lyft, Shopify, and others.
Through Friday, May 3rd, we have seen Q1 results from 400 S&P 500 index members, or 80% of the index’s total membership. Total Q1 earnings for these 400 index members are up +4.4% from the same period last year on +4.2% higher revenues, with 78.3% beating EPS estimates and 61% beating revenue estimates.
The Earnings Big Picture
Looking at Q1 as a whole, total S&P 500 earnings are expected to be up +5.3% from the same period last year on +4.3% higher revenues, which would follow the +6.8% earnings growth on +3.9% revenue gains in the preceding period.
As you likely know already, the Tech and Energy sectors are having the opposite effects on the aggregate growth picture. Excluding the Tech sector, Q1 earnings for the rest of the index would be down -2.2%, while the growth pace improves to +8.3% on an ex-energy basis.
Looking at the overall earnings picture on an annual basis, total 2024 S&P 500 earnings are expected to be up +8.9% on +1.7% revenue growth.
For a detailed look at the overall earnings picture, including expectations for the coming periods, please check out our weekly Earnings Trends report >>>> A Positive Earnings Picture Remains
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