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Illustration: Aïda Amer/Axios

Not only are corporate earnings coming in above Wall Street’s expectations, but a large swath of corporate America is making more money now than before the pandemic hit.

By the numbers: Earnings season is nearly over. Of the companies that have reported quarterly results, 52% saw bigger profits compared to this time last year, according to data provided to Axios by FactSet.

What’s going on: The pandemic has forced new habits that has allowed some companies to fare even better than in normal economic conditions — against the bleak backdrop of a virus that’s killed hundreds of thousands of Americans and left millions in financial ruin.

  • The profit improvements come as lockdowns eased. In the March to May quarter, roughly 38% of the S&P 500 saw year-on-year improvements in profits, per FactSet data.
  • And, it's not just Big Tech companies that have benefited from circumstances created by the pandemic. There are S&P companies across all sectors getting a boost from the "coronavirus new normal."
Data: FactSet, as of Nov. 10; Note: Net income on a GAAP basis; Chart: Axios Visuals

The other side: Simon Property Group, the largest shopping mall landlord in the country, is the latest example of a company getting dragged down by the pandemic.

  • The company brought in $723 million — still plenty of money, but less than the $1 billion it brought in during the same time last year, the company said this week.

Between the lines: Wall Street wants to know whether some companies’ pandemic-driven demand is sustainable — or if this is as good as it gets. It's a question that's popping up often during analyst calls.

1. On the Equifax analyst call late last month, Evercore Group analyst David Mark Togut said, “The number one investor question I receive on Equifax is whether revenue and earnings growth is peaking given this extraordinary mortgage market expansion ... along with the increased appetite for employment and income data during the COVID pandemic.”

  • Equifax’s profits more than doubled to $224 million, compared to Q3 of last year. (Even if you don’t include the charge it took last year for that massive data breach, there’s still a year-on-year improvement.)

2. Newell Brands CFO Christopher Peterson told analysts last month that the factors driving consumers to stock their cabinets with their products “are likely to continue and sustain for some time because we don’t see a slowdown in at-home behavior or increased focus on sanitization and cleaning and those trends.“

3. When Akamai was asked by an analyst in August if it could sustain the level of demand as things start to become a "new normal," Adam Karon, an executive within its media and carrier division, said, “You’ll see normal growth rates kind of resume into the future.”

The bottom line: The pandemic that forced unprecedented lockdowns and millions of people out of work has created boom times for just over half of S&P 500 companies so far.

  • Yes, but: It’s still not enough to pull up overall year-over-year earnings, thanks to “the large magnitude of the earnings declines reported by some companies,” like airlines, says John Butters, a senior earnings analyst at FactSet.
  • Q3 profits are set to be decline 7.5% from the same period a year ago, per FactSet.

Go deeper

Dion Rabouin, author of Markets
Jan 29, 2021 - Economy & Business

The state of the U.S. economy after one year of the coronavirus

Source: St. Louis Fed; Billions of chained 2012 dollars; Chart: Axios Visuals

The U.S. economy shrank by 3.5% last year, the Commerce Department reported, with the country seeing both its largest quarterly GDP decline and its largest quarterly GDP increase in the second and third quarters, respectively.

Where it stands: The 3.5% decline is the worst year for the U.S. since at least the end of World War II, and the economy is more than $473 billion smaller than it was before the pandemic hit.

App rush: Talent over trash

Data: Knight First Amendment Institute at Columbia University. Chart: Michelle McGhee/Axios

Amid the sea of pollution on social media, another class of apps is soaring in popularity: The creators are paid, putting a premium on talent instead of just noise.

The big picture: Creator-economy platforms like Patreon, Substack and OnlyFans are built around content makers who are paid. It's a contrast to platforms like Facebook that are mostly powered by everyday users’ unpaid posts and interactions.

Dan Primack, author of Pro Rata
1 hour ago - Economy & Business

The mental health deal boom

Illustration: Sarah Grillo/Axios

The positive social media response to Simone Biles withdrawing from Olympic competition highlights how the artificial line between health care and mental health care is finally beginning to dissolve. And startup investors have taken notice.

By the numbers: Venture capital investments in mental health startups rose 72.6% between Q1 2020 and Q1 2021, per CB Insights.