S&P 500 quarterly earnings have been upbeat; revenue not so much

Aug 7 (Reuters) – S&P 500 companies have been reporting upbeat bottom lines for the June quarter, but not such impressive increases in their revenue.

With second-quarter reporting season nearly complete, 79% of companies have posted earnings that beat analysts’ expectations, according to fresh data from Refinitiv.

In a typical US earnings season, most companies report results that are higher than analysts’ average estimates, but the number of beats and misses varies by quarter.

This quarter’s beat rate for earnings per share is the highest since the third quarter of 2021, and it suggests an uncertain economy has hurt companies less than feared.

However, nearly 64% of companies have posted revenue that exceeded Wall Street’s expectations, the lowest beat rate for that metric since the first quarter of 2020.

The recent upbeat earnings performance of many S&P 500 companies follows waves of job cuts this year, prompted by worries the US Federal Reserve’s aggressive interest rate hikes might throw the US economy into a downturn.

Major technology-related companies including Meta Platforms (META), Amazon (AMZN), and Alphabet (GOOGL) have laid off tens of thousands of workers, solidifying their profit margins while their revenue continued to grow.

Amazon.com’s stock surged over 8% on Friday after it reported sales growth and profit that both beat Wall Street’s expectations.

In quarterly reporting seasons going back over two decades, 66% of companies have beaten on earnings and 62% have exceeded revenue estimates.

While mostly beating estimates, second-quarter earnings are on track for an overall decline of 4.2% year over year, according to Refinitiv.

Excluding the energy sector, S&P 500 earnings have climbed 2.0%, moving into positive territory for the first time after the four previous quarters.

Second-quarter revenue so far has increased 0.2%, and grown 4.0% excluding energy companies.

(Reporting by Noel Randewich; Editing by Cynthia Osterman)