Feb 14, 2020 - Economy

Earnings on pace for a strong rebound

Data: FactSet; Chart: Axios Visuals
Data: FactSet; Chart: Axios Visuals

Thanks to a cadre of better-than-expected earnings results from the companies that have reported their fourth-quarter earnings so far, the earnings growth rate for the S&P 500 has risen to 0.7%.

Why it matters: That is a far cry from the estimated earnings decline of -1.7% at the end of the quarter. If it holds, this would mark the first time the index has reported year-over-year growth in earnings since Q4 2018. 

What's happening: Positive earnings surprises have led to a net $8.5 billion increase in earnings for the index since Dec. 31, FactSet senior earnings analyst John Butters notes.

  • This has been driven largely by IT companies, which have accounted for $5.4 billion of the net $8.5 billion increase (or about 63%).
  • "The positive earnings surprises reported by Apple ($4.99 vs. $4.55), Microsoft ($1.53 vs. $1.32), and Intel ($1.52 vs. $1.25) were substantial contributors to the increase in earnings for the index during this time," Butters says.

Go deeper: S&P 500 earnings continue to improve

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