S&P 500 Q3 2024 Sector Earnings & Revenue Data

• 73% of S&P 500 constituents exceeded EPS expectations compared to S&P Capital IQ Estimates, marking a 5% decline from Q2 and Q1 2024 (both at 78%) and a 1% drop from Q4 2023 (74%).
• 62% of S&P constituents outperformed Revenue expectations vs. S&P Capital IQ Estimates, a 1% increase from the previous quarter, a 3% increase from Q1 2024, but still down 4% compared to Q4 2023.
• Year-over-year, the S&P 500 recorded an EPS growth rate of 13.1%, falling 3.2% from Q2, 4.1% from Q1, and 5.8% from Q4 2023.
   

EPS Beats and Misses %

In Q3 2024, 73% of S&P 500 constituents exceeded EPS expectations compared to S&P Capital IQ Estimates, marking a 5% decline from Q2 and Q1 2024 (both at 78%) and a 1% drop from Q4 2023 (74%). This quarter’s result represents the lowest percentage of EPS beats in the past two years but remains notably higher than the 68% reported in Q4 2022. Looking ahead, optimism for Q4 and 2025 persists post-election, supported by a generally bullish economic outlook. However, uncertainties such as potential tariffs, corporate tax changes, and possible Fed rate cuts could shape an eventful 2025 for investors.

Among sectors, Information Technology led with 87% of firms surpassing EPS estimates, driven by ongoing AI advancements. Last quarter, 78% of Information Technology constituents exceeded estimates, marking the sector’s first sub-80% performance in years, while this quarter saw a strong rebound, aligning more closely with past trends. Historically, Information Technology has held the top spot in four of the last five quarters.

Health Care followed with 84% of its constituents beating EPS expectations, despite falling 5% from Q2 and 2% from Q1. This sector has consistently surpassed 80% each quarter this year, highlighting its robust performance. Financials secured the third spot at 79%, a sharp decline from 87% in Q2. Rounding out the top five were Communication Services and Consumer Staples, both with 74% of firms outperforming EPS estimates.

Materials posted the lowest EPS beat rate at 46%, a steep fall from 77% in Q2, 78% in Q1, and 70% in Q4 2023. This marked the first time Materials dropped below 70% since Q4 2022, when only 64% surpassed expectations. Real Estate followed at 55%, reflecting a 15% decline from Q2 2024. Consumer Discretionary rounded out the bottom three at 64%, underscoring continued sector-specific pressures.

Revenue Beats and Misses %

In Q3 2024, 62% of S&P constituents outperformed Revenue expectations vs. S&P Capital IQ Estimates, a 1% increase from the previous quarter, a 3% increase from Q1 2024, but still down 4% compared to Q4 2023. Although the percentage has grown over the last two quarters, it remains well below the 74% reported in Q1 2023.

Among sectors, Information Technology once again led with 87% of firms surpassing Revenue estimates, reflecting a 5% increase from Q2 2024 and a 20% jump from Q1 2024. This was also the highest percentage observed for the sector in recent years, benefiting from continued AI-driven growth. Following Information Technology, Health Care recorded 79%, matching its Q2 performance and improving 10% from Q1 2024. This marked the second consecutive quarter where Information Technology and Health Care held the top two spots. These sectors remain key to watch for Q4 earnings. Real Estate secured the third spot at 77%, a 9% increase from Q2 and a 6% gain from Q1.

The lowest-performing sector for Revenue beats was Materials at 36%, reflecting a 12% decline from the previous quarter and a 10% drop from Q1. Following Materials were Utilities at 42% and Consumer Discretionary at 48%. Rounding out the bottom five were Consumer Staples and Industrials, with 50% and 52%, respectively.

EPS Growth % (Q3 2023 vs. Q3 2024)

Year-over-year, the S&P 500 recorded an EPS growth rate of 13.1%, falling 3.2% from Q2, 4.1% from Q1, and 5.8% from Q4 2023. This decline has persisted over recent quarters, but with the U.S. election concluded and a more optimistic economic outlook, EPS growth could recover as we head into 2025.

Four sectors experienced negative EPS growth this quarter: Energy (-28.5%), Real Estate (-5.5%), Industrials (-5.0%), and Materials (-2.5%). Communication Services led all sectors with 35.2% EPS growth, though this marked a decline of 11.6% from Q2, 38.4% from Q1, and 61.1% from Q4 2023.

Information Technology followed with a 17.2% EPS growth rate, increasing 1.3% from Q2 and dipping just 0.1% from Q1. Rounding out the top five were Consumer Discretionary at 11.6% and Financials at 10.8%. Health Care, Utilities, and Consumer Staples reported single-digit positive EPS growth year-over-year.

Revenue Growth % (Q3 2023 vs. Q3 2024)

In Q3 2024, the S&P 500 recorded a year-over-year revenue growth rate of 10.8%, a slight decline of 0.4% from Q2 and 0.1% from Q1, but a 1.5% increase from Q4 2023. Information Technology led with an 18.3% revenue growth rate, increasing 0.8% from Q2, 3.5% from Q1, and 10% from Q4 2023, supported by ongoing AI-driven demand. Communication Services followed at 15.1%, up 2.3% from Q2 but down 0.6% from Q1. These two sectors house most of the Magnificent Seven companies, making it no surprise they've maintained the top two positions throughout the year.

Rounding out the top-performing sectors, Health Care and Consumer Discretionary both reported 10.3% revenue growth. In contrast, we observed two negative sectors, with Energy seeing a -3.0% decline, and Industrials reporting a slight dip of -0.6%. Real Estate, Utilities, Consumer Staples, Financials, and Materials all posted single-digit revenue growth year-over-year.

Source: S&P Capital IQ Pro. Data as of December 12, 2024.