S&P 500 Is Reporting Second Highest Revenue Growth Since (At Least) 2008

As of today, the blended (combines actual results for companies that have reported and estimated results for companies that have yet to report), year-over-year revenue growth rate for Q3 2021 is 17.3% for the S&P 500, which is above the estimate of 12.6% on June 30 and the estimate of 14.9% on September 30. How does this growth rate compare to recent quarters? What sectors and companies are reporting the highest growth in revenues?

The Q3 revenue growth rate of 17.3% is well above the five-year average growth rate of 5.8% and the 10-year average growth rate of 3.5%. In fact, if 17.3% is the actual growth rate for the quarter, it will mark the second highest year-over-year revenue growth rate reported by the index since FactSet began tracking this metric in 2008. The current record is 25.3%, which occurred in Q2 2021. The unusually high growth rate is due to a combination of higher revenues in Q3 2021 and an easier comparison to lower revenues in Q3 2020 due to the negative impact of COVID-19.

At the sector level, all 11 sectors are reporting year-over-year growth in revenues. On a percentage basis, eight of the 11 sectors are reporting double-digit revenue growth, led by the Energy (74.5%) and Materials (32.0%) sectors. On a dollar-level basis, seven of the 11 sectors are reporting a year-over-year increase in revenues of at least $40 billion, led by the Energy (+$118.0 billion) and Health Care (+$84.4 billion) sectors.

At the company level, Moderna (+3,047%), Norwegian Cruise Line (+2,249%), Carnival Corporation (+1,661%), and Live Nation Entertainment (+1,367%) have reported the largest year-over-year increases in revenues on a percentage basis, while Exxon Mobil (+$27.6 billion), Chevron (+$20.3 billion), Alphabet (+$18.9 billion), and Apple (+$18.7 billion) have reported the largest year-over-year increases in revenues on a dollar-level basis.

Analysts expect year-over-year growth in revenues to continue for the next few quarters, but at lower levels compared to Q3 2021. The estimated revenue growth rates for Q4 2021, Q1 2022, and Q2 2022 are 12.1%, 8.9%, and 7.0%, respectively.

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