With nearly half of the S&P 500 reporting, Q4 earnings are on track to surge 206%vs 2008. Sounds impressive. But that's largely due to a big recovery from the economic and credit market meltdown at the end of 2008.
Banks swung to profits after suffering massive losses at the peak of the crisis. Excluding financials, the S&P 500 should report more-modest but still solid 15% growth, according to Thomson Reuters.
Results are in from 220 of the S&P 500 firms. A very high 78% have topped Q4 EPS views. Two-thirds have beaten sales targets.
S&P 500 revenue likely rose just 7% in Q4, or 2% excluding financials.
But after several quarters of layoffs and other cost cuts, even a modest demand pickup can fuel big bottom-line gains.
Earnings likely more than doubled for the consumer discretionary sector, including battered auto-related firms. Materials companies' profits will nearly triple.
Meantime, health care and industrials are on track for single-digit profit drops. Medical firms saw relatively steady profits in the recession compared to other sectors.
Techs are on track for 53% profit growth. Most of the big caps have reported, including Apple, Google, IBM, Intel, and Microsoft. All but one S&P 500 tech firm have topped Wall Street views -- by 25% on average. Analysts have been been raising their growth forecasts for 2010. They now see a 38.6% overall earnings jump in Q1, 48% for techs.
That hasn't satisfied investors. Since Jan. 11, when Alcoa kicked off earnings, the Nasdaq has fallen 7.1% and the S&P 500 6.4%.
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