S&P 500 Companies With More International Exposure Reporting Earnings Growth Above 10%

Given the stronger U.S. dollar in recent months, are S&P 500 companies with more international revenue exposure reporting lower (year-over-year) earnings and revenues for Q3 compared to S&P 500 companies with more domestic revenue exposure?

The answer is no. FactSet Geographic Revenue Exposure data (based on the most recently reported fiscal year data for each company in the index) was used to answer this question. For this analysis, the index was divided into two groups: companies that generate more than 50% of sales inside the U.S. (more domestic exposure) and companies that generate more than 50% of sales outside the U.S. (more international exposure). Aggregate earnings and revenue growth rates were then calculated based on these two groups.

The blended (combines actual results for companies that have reported and estimated results for companies that have yet to report) earnings growth rate for the S&P 500 for Q3 2024 is 5.4%. For companies that generate more than 50% of sales inside the U.S., the blended earnings growth rate is 1.5%. For companies that generate more than 50% of sales outside the U.S., the blended earnings growth rate is 12.9%.

The blended revenue growth rate for the S&P 500 for Q3 2024 is 5.5%. For companies that generate more than 50% of sales inside the U.S., the blended revenue growth rate is 5.3%. For companies that generate more than 50% of sales outside the U.S., the blended revenue growth rate is 6.1%.

What is driving the outperformance of S&P 500 companies with higher international revenue exposure? At the company level, NVIDIA, Pfizer, Alphabet, and Meta Platforms are four of the top six contributors to earnings and revenue growth for S&P 500 companies with more international revenue exposure. Three of these four companies are “Magnificent 7” companies.

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