Tech, energy, and healthcare industries outperform expectations, making this earnings season in the US stock market "unexpectedly strong."
"Cost reduction and efficiency improvement" is significant, with 80% of companies in the SPDR S&P 500 reporting earnings that exceed expectations. The fourth quarter is expected to be the best quarter for performance in 2023.
US Earnings Season is more than halfway through, with profit performance generally better than expected, but indicating a bleak outlook for companies.
According to media reports, this quarter, the earnings growth rate of Pro UltrPro Shrt S&Pro 500 is 7.8%, surpassing the 7.5% in the third quarter, currently at the highest level this year, and is expected to be the best-performing quarter for the full year of 2023.
Among them, 80% of companies' earnings reports exceeded expectations, slightly higher than the normal trend, with an average earnings surprise of over 6%. Weighted stocks such as Amazon, Apple, Meta, and Exxon Mobil outperformed other companies in terms of earnings, driving a significant increase in overall earnings growth for the fourth quarter.
The media pointed out that the effectiveness of companies' cost reduction and efficiency improvement efforts has helped them achieve better-than-expected profits.
The performance of the technology, energy, and healthcare industries is particularly impressive:
Energy industry: 90% of companies exceeded earnings expectations, with average earnings surpassing expectations by nearly 14%.
Healthcare industry: 85% of companies exceeded earnings expectations, with average earnings surpassing expectations by nearly 11%.
Technology industry: 84% of companies exceeded earnings expectations, with average earnings surpassing expectations by more than 5%.
However, despite the significant improvement in profitability this year, market performance is still far below Wall Street's expectations four months ago. According to data from LSEG on October 1st last year, Pro UltrPro Shrt S&Pro 500's fourth-quarter earnings are expected to increase by 11% YoY.
Moreover, companies have not released positive signals about future expectations, and many companies' performance guidance appears to be more "cautious": earnings expectations for the first quarter and full year of 2024 have been revised downward.