Corporate America shrugging off economic uncertainty as earnings deliver
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Sarah Grillo/Axios
Corporate America is delivering the goods this earnings season, dampening fears about the economy, even as rising energy prices threaten to undermine the momentum.
Why it matters: Economic uncertainty tied to the Iran war — alongside stubborn inflation and souring consumer sentiment — don't seem to have derailed earnings in Q1.
Zoom in: Wednesday's winners included:
- Uber: After reporting a 25% rise in bookings, CEO Dara Khosrowshahi told CNBC: "The consumers are spending, they're spending locally, and we don't see any signs of that weakening at this point."
- Disney: The company recorded better-than-expected operating income at all three of its divisions — entertainment, experiences and sports — as Bloomberg noted. Consumers are visiting parks at a "healthy" pace, Disney said.
- CVS Health: The drugstore chain and Aetna owner raised its 2026 earnings guidance as medical costs fell sharply.
- Novo Nordisk: The GLP-1 drug maker raised its guidance after its first oral weight loss pill got off to a promising start with 2 million prescriptions already.
The big picture: About two-thirds of the way into earnings season, 84% of companies in the S&P 500 have topped earnings estimates, according to FactSet.
- That easily beats the 5-year average of 78%.
- "Both the percentage of S&P 500 companies reporting positive earnings surprises and the magnitude of earnings surprises are above recent averages," FactSet reports.
- "This is one of the best earnings seasons in 20 years," Deutsche Bank researchers wrote Wednesday.
- All 11 top-level sectors of the S&P 500 — including technology, healthcare and industrials — are expected to show year-over-year earnings growth for the first time in four years, they noted.
Yes, but: The collapse of Spirit Airlines after jet fuel prices spiked illustrates how much damage the Iran war could yet cause to the economy.
- The broader airline industry is suffering with operating costs jumping.
- And some companies are struggling for other reasons: Restaurant Brands International reported Wednesday that its comparable sales fell 6.5%. It was the chain's worst quarterly performance in at least 20 years, according to Restaurant Business Magazine.
The bottom line: Corporate earnings aren't a 1-to-1 indicator of the economy's health, but they're not a bad sign either.
