In This Article:
For Immediate Release
Chicago, IL – January 9, 2025 – Zacks Director of Research Sheraz Mian says, "The magnitude of earnings and revenue revisions compares favorably to what we had seen in the comparable period of the preceding period."
Broad-Based Growth Expected in 2025
Note: The following is an excerpt from this week’sEarnings 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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For 2024 Q4, total S&P 500 earnings are currently expected to be up +7.4% from the same period last year on +4.8% higher revenues.
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Q4 earnings growth improves to +9.6% once the Energy sector’s drag is removed from the aggregate numbers, but the growth pace drops to +3.8% once the Tech sector’s substantial contribution is excluded.
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Estimates for the period came down since the quarter got underway, but the magnitude of revisions compares favorably to what we had seen in the comparable period of the preceding period.
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All 16 Zacks sectors are expected to enjoy positive earnings growth in 2025, with nine expected to have double-digit earnings growth. These include Aerospace (+60.6%), Consumer Discretionary (+26.4%), Medical (+22.8%), Tech (+16.9%), Basic Materials (+14.6%), Retail (+10.6%), Business Services (+11.6%), Conglomerates (+11.1%), and Transportation (+15.1%).
Tech Driving Earnings Growth
The Tech sector has been a significant growth driver in recent quarters, and the trend is expected to continue in 2024 Q4 and beyond. For Q4, Tech sector earnings are expected to be up +14.9% from the same period last year on +10.4% higher revenues, the 6th quarter in a row of double-digit earnings growth.
This would follow the sector’s +22.6% earnings growth on +11% higher revenues in 2024 Q3. The sector’s growth trajectory is expected to continue in the coming quarters.
In addition to the Tech sector’s strong growth profile, the sector is also among the few sectors whose earnings outlook is steadily improving. This shows up in the revisions trend for the Tech sector for both Q4 and full year 2025.
Take the examples of Nvidia NVDA and Meta Platforms META. The current Q4 Zacks Consensus EPS estimate for Nvidia of 84 cents is up from 78 cents two months back. The same consensus EPS estimate for Meta of $6.76 has increased +7.1% over the last two months.
The Earnings Big Picture
The expectation is for double-digit earnings growth in each of the next two years, with the number of sectors enjoying strong growth notably expanding from the narrow base we have been seeing lately.