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Q1 US PROFIT GROWTH NOW SEEN AT 29%, HIGHEST IN RECENT YEARS

With the first-quarter earnings season quickly winding down, estimated year-over-year profit growth for S&P 500 .SPX companies is now at 28.6%, according to data Friday from Tajinder Dhillon, head of earnings research at LSEG. The growth would be the highest it has been for any quarter in recent years.

The latest figure is based on results from 440 S&P 500 companies and estimates for the rest. It compares with a growth estimate of 14.4% at the start of April. About 83% of companies that have reported earnings have beaten analyst expectations, which compares with the 78% average for the past four quarters, he notes.

In aggregate, companies are reporting earnings 8.1% above expectations, he writes, adding that this compares to a long-term average since 1994 of 4.4% and an average of 7.1% for the prior four quarters.

Earnings growth for all of 2026 is now estimated at 24%, which remains on track to be the highest growth since 52.4% in 2021, or since 24.1% in 2018 if one excludes the 2021 post-pandemic-related jump in earnings, Dhillon has said.

Corporate spending on artificial intelligence is benefiting several industries. AI hyperscalers are building out data centers and other infrastructure to support the technology.

To be sure, sharply higher energy prices following the February 28 start of the Iran war remain a concern for companies and investors.

And corporate reports will still be closely watched in the weeks ahead. Next week's results include reports from Cisco CSCO.O and semiconductor equipment maker Applied Materials AMAT.O. Still to come this month are results from megacap Nvidia NVDA.O and Walmart WMT.O.

(Caroline Valetkevitch)

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