During third quarter earnings season, most of the S&P500 companies are reportedly on course to deliver sales beat in about four years as American industries cope just fine with tariffs’ impact.
According to Bloomberg Intelligence earnings tracker, nearly 70% of index members have exceeded Q3 sales estimates, the highest amount of positive surprise since post-Covid revival in the last three months of 2021.
Additionally, the magnitude of the sales beat is near the highest since the post-pandemic boom as companies exceeded sales estimates by 2.4% in total versus a historical average of 0.5% as per the strategists at Deutsche Bank AG, reported Bloomberg.
During the quarter, companies like Tesla (TSLA), Intel (INTC), Bank of America (BAC), JPMorgan Chase (JPM), General Electric (GE), Johnson & Johnson (JNJ), Ford (F) and The Coco-Cola Company (KO) among others beat Q3 sales estimates. On the other hand, Netflix (NFLX) and AT&T (T) missed sales estimates.
According to the Bloomberg report, Wall Street analysts believe that the strong earnings and sales growth is concentrated in mega cap and technology stocks. However, other sectors also delivered decent profits so far, helped by favorable comparable.
Deutsche Bank strategists noted that Financials, Real Estate, Materials and Utilities sector are showing double-digit earnings gains, highlighted a Bloomberg report.
However, RBC Capital market analyst Lori Calvasina reportedly warned that the current positive trend may not be easy to sustain.
Companies accounting for almost half of the S&P 500 market capitalization due to report earnings this week, including companies like Microsoft (MSFT) and Meta Platforms (META).