Excluding Bristol Myers Squibb, S&P 500 Would Be Reporting Earnings Growth Above 8% for Q1

The blended (combines actual and estimated results) year-over-year earnings growth rate for the S&P 500 for Q1 2024 is 5.4%. If 5.4% is the actual growth rate for the quarter, it will mark the highest year-over-year earnings growth rate reported by the index since Q2 2022 (5.8%).

As previously noted, the top five contributors to earnings growth for the index for Q1 are “Magnificent 7” companies: NVIDIA, Alphabet, Amazon.com, Meta Platforms, and Microsoft. Excluding these five companies, the S&P 500 would be reporting a year-over-year earnings decline of -2.4% rather than earnings growth of 5.4% for Q1.

On the other hand, which company is the largest detractor to earnings growth for the S&P 500 for Q1 2024?

Bristol Myers Squibb is the largest detractor to earnings growth for the S&P 500 for the first quarter. On April 25, the company reported (non-GAAP) EPS of -$4.40 for Q1 2024 compared to (non-GAAP) EPS of $2.05 for Q1 2023. The non-GAAP EPS number for Q1 2024 included a net impact of -$6.30 due to “Acquired IPRD charges and licensing income primarily driven by the Karuna Therapeutics asset acquisition and SystImmune collaboration.” On a dollar-level basis, the company reported a year-over-year decline in (non-GAAP) earnings of more than $13 billion. If Bristol Myers Squibb were excluded, the blended earnings growth rate for the S&P 500 for Q1 2024 would improve to 8.3% from 5.4%.

Bristol Myers Squibb is a company in the Health Care sector. This sector is reporting a year-over-year decline in earnings of -25.4% for Q1 2024. Other companies in the Health Care sector that are significant detractors to (year-over-year) earnings growth for the S&P 500 for Q1 2024 are Gilead Sciences (-$1.32 vs. $1.37) and Pfizer ($0.82 vs. $1.23). If Bristol Myers Squibb, Gilead Sciences, and Pfizer were excluded, the blended earnings growth rate for the S&P 500 would improve to 9.7% from 5.4%.

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