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The Q4 2024 earnings season tapers off from here, with S&P 500® EPS growth surpassing 17%, the highest in 3 years
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Large cap outlier earnings dates this week include: Diamondback Energy, Realty Income Corp, FirstEnergy and The Mosaic Company
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This is the final week of peak season, with 2,530 companies expected to report
The fourth quarter 2024 earnings season more-or-less wraps up this week with the final trickle of retailers coming in, as well as the highly anticipated report from Nvidia (NASDAQ:NVDA) which was out yesterday afternoon. At this point, roughly 90% of S&P 500 companies have reported results for Q4, showing YoY EPS growth of 17% and revenue growth just over 5%.
Tuesday's Q4 results from Home Depot (NYSE:HD) surprised investors with a slight beat on both the top and bottom-line. This comes after a Q3 earnings call during which management commented on the slowing of the US consumer who seemed to be deferring large ticket home improvement projects. The outlook was more positive on this call, with the company’s CFO, Richard McPhail, anticipating consumers will stop putting off projects as they begin to accept higher interest rates as the norm.
The home improvement retailer’s results come at a time when the US housing market is struggling. Last Wednesday, US Housing Starts for January slid to an annualized 1.366M, a nearly 10% decline MoM. Many things likely contributed to the decline, including severe weather around the country that delayed construction, rising material costs due to import tariffs and stubbornly high mortgage rates. Despite this, home prices continued to rise higher according to the latest reading of the S&P Case-Schiller Index which showed an increase of 3.9% in December, the 19th consecutive monthly increase.
Recent readings on the US consumer have also confirmed there is uncertainty in the air. The University of Michigan Consumer Sentiment reading for February slid nearly 10% MoM, the second consecutive monthly decline. The survey found that 40% of those surveyed were concerned about tariffs and the possibility that they would reignite inflation. The February reading on consumer confidence from The Conference Board showed the same, with the index slipping nearly 7% MoM, the largest monthly drop since August 2021.
This most certainly impacts retailers that started reporting last week. WalMart, after beating expectations on the top and bottom-line for Q4, issued a warning about waning growth in 2025. TJX Companies (NYSE:TJX), the parent company of off-price retailers such as TJMaxx, Home Goods and Marshall’s also showed robust growth in the final quarter of 2024, but issued weaker-than-expected same store sales guidance for its fiscal 2026. Dollar stores, such as Dollar Tree (NASDAQ:DLTR), which doesn’t report until mid-March, has already announced they would likely have to discontinue carrying certain items that are made in China and may also raise prices to combat the impact of tariffs. Roughly 40% of Dollar Tree’s goods are derived from overseas.
To top off the week, AI darling Nvidia reported yesterday afternoon, beating sell side expectations on both the top and bottom-line. Revenue of $39.3B was a quarterly record for the company, as was yearly revenue of $130.5B, a 114% increase over 2023. Despite worries around the emergence of Chinese AI company DeepSeek, NVDA guided for sales of $43 billion in Q1, stronger than the Wall Street estimate of $41.78B.
US CEOs the Most Confident They’ve Been Since Q2 2022
Despite how consumers might be feeling, corporate confidence is rebounding. After rising to its highest level in four years during the last quarter of 2024, the Late Earnings Report Index (LERI), our proprietary measure of CEO uncertainty, has fallen back below the historical benchmark, a sign that clarity around future performance is improving.
The LERI tracks outlier earnings date changes among publicly traded companies with market capitalizations of $250M and higher. The LERI has a baseline reading of 100, and anything above that indicates that companies are feeling uncertain about their current and short-term prospects. A LERI reading under 100 suggests that companies feel they have a pretty good handle on the near-term.
The official post-peak season LERI reading for Q4 (data collected in Q1) stands at 72, well below the baseline reading, suggesting companies are feeling more certain about economic conditions than they were for the last three quarters. As of February 26, there were 156 late outliers and 196 early outliers.
These results were similar to last week’s reading from The Conference Board’s Measure of CEO Conference. The measure increased by 9 points in Q1 to 60, the highest level in three years, “indicating that CEOs have shifted from the cautious optimism that prevailed in 2024 to a more confident optimism.”
Source: Wall Street Horizon
On Deck This Week
This week marks the final peak week of earnings season with 2,530 companies (in our global universe of 11k) set to report, and 12 from the S&P 500.
Source: Wall Street Horizon
Outlier Earnings Dates This Week
Academic research shows that, when a company confirms a quarterly earnings date that is later than when they have historically reported, it’s typically a sign that the company will share negative news on their upcoming call, while moving a release date earlier suggests the opposite.15
This week we get results from a number of large companies on major indexes that have pushed their Q4 2024 earnings dates outside of their historical norms. Six companies within the S&P 500 confirmed outlier earnings dates for this week, all of which are later than usual and therefore have negative DateBreaks Factors*. Those names are Diamondback Energy (NASDAQ:FANG), Realty Income Corp (BVMF:R1IN34) (O), FirstEnergy (NYSE:FE), Synopsys (NASDAQ:SNPS), The Mosaic Company (NYSE:MOS) and Teleflex Incorporated (NYSE:TFX).
Q4 Earnings Wave
Yesterday, February 26, was the most active day of the entire Q4 earnings season with 931 companies reporting, followed closely by today, February 27, during which 869 companies are anticipated to report. Thus far, 82% of companies have confirmed their earnings date (out of our universe of 11,000+ global names), and 55% have reported results.
Source: Wall Street Horizon
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* Wall Street Horizon DateBreaks Factor: statistical measurement of how an earnings date (confirmed or revised) compares to the reporting company's 5-year trend for the same quarter. Negative means the earnings date is confirmed to be later than historical average while Positive is earlier.