S&P sales and profit are moving in the wrong direction
With more than 80% of S&P 500 companies now having reported fourth quarter results, it's becoming clear that sales growth is slowing but profit growth has plunged.
Why it matters: Profit margins are the tightest since 2017. Companies are blaming rising labor and material costs.
- According to FactSet, the S&P's collective after-tax profit margins have dropped to 10.7% from 11.3%.
Bonus stat: The percentage of S&P companies beating profit expectations trails the 5-year average. The number of companies that have topped sales estimates are above the 5-year average so far.