In This Article:
Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Here are the key points:
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The picture emerging from the 2024 Q4 earnings season is one of strength and improving outlook, with the companies not only coming ahead of estimates but also providing reassuring guidance for the coming quarters.
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Total earnings for the 62 S&P 500 companies that have reported results are up +19.6% from the same period last year on +8.4% higher revenues, with 82.3% beating EPS estimates and 69.4% beating revenue estimates.
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The earnings and revenue growth pace for the companies that have reported Q4 results represents a significant improvement over what we had seen in other recent periods. With respect to the Q4 beats percentages, the EPS beats percentage is tracking modestly above the average for the preceding 20 periods, while the revenue beats percentage is a hair below the 20-quarter average.
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For the Finance sector, we now have Q4 results for 41.3% of the index’s market capitalization in the S&P 500 index. Total earnings for these companies are up +26.2% from the same period last year on +10.9% higher revenues, with all the companies beating EPS estimates and 77.3% beating revenue estimates. This is notably better performance from these banks relative to other recent periods.
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If actual 2025 earnings results turn out to be as currently expected, this will be the first time since 2018 when all 16 Zacks sectors achieved positive earnings growth (to be precise, the Zacks Autos sector had modestly negative earnings growth in 2018).
Notable Earnings Results
Of the latest earnings releases, the blockbuster Netflix NFLX release contrasts with the underwhelming guidance in the Johnson & Johnson JNJ report.
Netflix has truly become the streaming leader, with the ad-supported subscription tier adding to the company’s growth. The high-margin advertising revenue benefits Netflix’s margins, as the roughly doubling of Q4 earnings relative to the year-earlier period shows. Netflix shares were up more than +75% over the past year before the awe-inspiring numbers, with the earnings results and price-hike announcements pushing them to a new all-time high.
Johnson & Johnson shares were struggling before the Q4 earnings release, with the stock down -9.7% over the past year, significantly underperforming the Zacks Medical sector as well as the broader market. The company beat top- and bottom-line estimates, but the full-year 2025 revenue guidance is below the current Zacks revenue consensus.