S&P 500 Companies Report Strong Q1 Earnings Beat Rate

About two-thirds of the way through first-quarter earnings season, 84 percent of S&P 500 companies have beaten their earnings estimates, according to FactSet. That figure exceeds the five-year average of 78 percent. Deutsche Bank researchers described the season as one of the strongest in 20 years.

All 11 top sectors of the S&P 500 are expected to show yearly earnings growth for the first time in four years. Most of the growth is coming from artificial intelligence-related demand in the technology sector, a Deutsche Bank strategist told The Post.

Consumer-oriented companies saw growth in the first quarter but at a slower pace.

Companies catering to lower- and middle-income consumers, such as McDonald’s and Domino’s, have already lowered their second-quarter outlooks. The economist said the impact will become more noticeable when retailers of big-ticket items begin cutting forecasts.

Home appliance maker Whirlpool warned it is facing a recession-level industry decline. The company slashed its full-year forecast and said higher prices are coming. Higher fuel prices, which are 50 percent above pre-war levels, are starting to affect consumer spending.

McDonald’s beat earnings and revenue estimates in the first quarter. The company joined stronger-than-expected reports from several fast-food and coffee chains. During a post-earnings call, the chief executive said consumer spending pressure from high gasoline prices is not improving and may be worsening.

Uber, Disney, CVS Health and Novo Nordisk also reported strong first-quarter results. Executives at those companies described continued consumer spending on rides, theme-park visits and other services. The technology sector contributed to the earnings strength with solid reports from several large firms that cited double-digit growth in artificial intelligence businesses.

America’s largest banks reported their strongest first-quarter profits in years. Bank executives pointed to a surge in trading activity. One bank posted record trading revenue of $11.6 billion while another reported its highest quarterly revenue in a decade at $24.6 billion with profit rising 42 percent.