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%.
This blog post is for informational purposes only. The information contained in this blog post is not legal, tax, or investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.