Corporate America's revenues are roaring back

Corporate America roared back into growth mode last quarter.

Why it matters: Better-than-expected numbers from third-quarter earnings season — which unofficially ended with Walmart's results last Thursday — helped lift stocks sharply this month.

Context: Leading up to Q3 earnings season, analysts had been focusing on the so-called earnings recession — unofficially defined as two consecutive quarters of shrinking profits — as a potential concern for the market.

• S&P 500 companies had seen shrinking profits in the fourth quarter of 2022, and the first two quarters this year.
• That string came to an end in Q3.

State of play: Reinforcing the narrative of the resilient American shopper, consumer discretionary companies did a lot better than expected, seeing their per-share profits rise by more than 40%, according to FactSet.

• Energy companies — which face tough comparisons to last year, when insanely high oil and gas prices delivered windfall profits — brought up the rear of the earnings parade. Their profits dropped by more than one-third, FactSet data said, though industry profits are still strong, historically speaking.

The bottom line: Corporate America is in pretty good shape.