Source: Golden Ten Data
Strong consumer spending boosted some of America's largest companies' profit growth in the third quarter.
Earnings for America's largest companies are expected to collectively grow for the first time in a year, partly benefiting from strong consumer spending this summer.
According to FactSet data,$S&P 500 Index (.SPX.US)$Constituent stock companiesEarnings for the third quarter are expected to increase 3.7% year over year, the first increase since the same period last year.Revenue is expected to grow 2.3% year over year.
Consumer spending is driving profit growth as Americans continue to eat out, travel, and shop online.$Starbucks (SBUX.US)$CEO Laxman Narasiman said on the company's earnings call:
“Our customer demand remains strong, and we haven't seen any change in the sentiment of our customer base.”
What are the two most profitable industries in the S&P 500 IndexCommunications services and consumer durables.
Companies in these two industries include restaurant operators such as$McDonald's (MCD.US)$with$Starbucks (SBUX.US)$; Internet giants such as$Amazon (AMZN.US)$with$Alphabet-A (GOOGL.US)$; Tourism-related companies such as$Airbnb (ABNB.US)$with$Marriott International (MAR.US)$; and streaming giants such as$Comcast (CMCSA.US)$with$Netflix (NFLX.US)$.
The following is the situation of the S&P 500 index constituent stock companies that have published financial reports up to the third quarter so far:
Each point in the chart represents a company in the S&P 500 index published in recent weeks.The company with the highest earnings per share in Q3 2023 is at the top of the chart, and the company with the lowest earnings per share is at the bottom.Earnings per share for the same period last year were arranged in order from the lowest point on the left to the highest point on the right.
About 60% of companies reported earnings per share higher than the same period last year, and these points appear on the left side of the diagonal line.The point furthest from the diagonal, such as$3M (MMM.US)$with$Stanley Black & Decker (SWK.US)$As the company recorded a decline in profit, the gap widened in the third quarter of this year compared to the same period last year.
The overall profit growth of the S&P 500 Index was supported by some large companies.ranging$Apple (AAPL.US)$with$Microsoft (MSFT.US)$.In the chart below, the size of these points reflects the market value of each company.
$Alphabet-A (GOOGL.US)$with$Meta Platforms (META.US)$Drive the information service industry to record the strongest profit growth rate.
The consumer durable goods industry is also one of the major beneficiaries.Among them, the profit growth of companies such as Amazon (AMZN.O) and McDonald's (MCD.N) was also significant.
The chart below shows the company's stock price performance over the past month. The falling stocks are on the left and the rising ones are on the right.$Tesla (TSLA.US)$(TSLA.O)'s stock price recorded a decline after the company's financial report was released.Microsoft (MSFT.O) and$Chipotle Mexican Grill (CMG.US)$(CMG.N)The company's stock prices have risen over the past month, and their quarterly results have also recorded good performance compared to the same period last year.
edit/new