FactSet projections as of Friday suggest the S&P 500 will report earnings growth of 0.9% for the first quarter of 2024. Although the latest projection is lower than the 3.4% estimate on March 31, the index is still on track for a third straight quarter of earnings growth, thanks to heavy hitters like Nvidia.
Six sectors are on track to report growth from the year-ago quarter, according to FactSet. Utilities — a sector rarely known for growth — heads the list with an expected earnings increase of 23%.
Information Technology, Communication Services and Consumer Discretionary are also reporting earnings growth. Energy, Materials and Health Care lead five sectors reporting earnings declines.
Notably, three Magnificent Seven companies are expected to account for most if not all the increase for three S&P sectors.
Nvidia Stock Accounts For Most Of Sector Earnings
Nvidia is the highest contributor to earnings growth in Information Technology. Analysts expect the sector to report 20.4% profit growth for the quarter. Without Nvidia stock, the EPS growth rate for the sector would plunge to 7.6%, FactSet calculates.
Nvidia stock analysts expect April-quarter earnings of $5.17 a share, an increases of 469%, according to MarketSurge.
The consensus estimate for the Communications Services sector is for earnings growth of 19.4%. That would rank third among the 11 S&P sectors. Meta Platforms is the single biggest contributor. Without Meta, earnings for the sector would rise just 9.1%.
Both Nvidia and Meta Platforms are holdings on IBD Leaderboard as well as IBD 50.
In Consumer Discretionary, Amazon.com single-handedly is expected to turn a sectorwide negative earnings performance of -3.1% into profit growth of 14.6%.
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