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As part of my responsibilities at Ritholtz Wealth, every Monday morning during earnings season I put together an earnings update for the team.
It helps keep everyone informed on how companies are reporting, what sectors are seeing the most growth, and we can then turn the update into content for the shows, blogs, and my colleague Sean can pull info from it into Josh’s CNBC notes. It’s a great system.
Today I am sharing the update with all of you because the numbers are simply too good to keep for ourselves.
First, blended earnings growth.
I try to be minimal on jargon here so first let me explain what “blended” means before showing you the chart. The numbers you are seeing above are a combination of the actual numbers that have been reported so far and then the estimates of the remaining companies that have yet to report.
At the beginning of the reporting season, the blended figure is mostly guesses. The analysts simply don’t have any “actuals” in hand. But as more companies report, analysts can read-through their earnings and refine their estimates for other similar companies.
Here’s what I mean:
When Delta reports an increase in bookings, the United Airlines analyst may tweak his or her model which will move their estimate for the quarter.
After Target reports, the analyst covering Walmart has a better view of how the consumer held up in the back half of the quarter. And then the estimate may move.
And that’s what “blended” figures are all about. Taking in the actual company numbers that have reported plus the refined estimates to give us the best guess as to how the full quarter will end.
That was a long explanation so I’ll put that blended earnings growth chart back in so you don’t have to scroll up. These numbers are staggering.
These do not include the private mark-ups.
Ten sectors are expected to report earnings growth this quarter.
Eight are expected to post double-digit earnings growth.
The S&P 500 (overall) is expected to grow earnings 32.2%. Talk about running it hot. That number is on fire.
And now for revenue. You can get creative on the bottom line, hard to fake old-fashioned revenue growth. These are blended figures as well.
Every sector is expected to grow revenue this quarter. The S&P 500 (overall) is expected to grow sales by 15.4%. That’s the strongest revenue growth since Q4 2021. And remember, we’re not coming off a “low base.”
Corporate America is resilient AF. These companies are crushing estimates, raising guidance, and their stock prices are following suit.
It’s exactly what you want to see in a healthy bull market.
Thank you for reading!
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