S&P 500 Reporting Higher Net Profit Margin Quarter-Over-Quarter for Q1

Given continuing concerns in the market about inflation, what is the S&P 500 reporting for a net profit margin for Q1?

The (blended) net profit margin for the S&P 500 for Q1 2024 is 11.5%, which is in line with the year-ago net profit margin and the 5-year average, but above the previous quarter’s net profit margin.

At the sector level, six sectors are reporting a year-over-year increase in their net profit margins in Q1 2024 compared to Q1 2023, led by the Information Technology (25.5% vs. 22.4%), Utilities (13.4% vs. 10.3%), and Communication Services (13.5% vs. 10.9%) sectors. On the other hand, five sectors are reporting a year-over-year decrease in their net profit margins in Q1 2024 compared to Q1 2023, led by the Health Care (6.3% vs. 9.3%) and Energy (9.6% vs. 12.5%) sectors.

Six sectors are reporting net profit margins in Q1 2024 that are above their 5-year averages, led by the Information Technology (25.5% vs. 23.4%) and Communication Services (13.5% vs. 11.5%) sectors. On the other hand, five sectors are reporting net profit margins in Q1 2024 that are below their 5-year averages, led by the Health Care (6.3% vs. 10.0%) and Materials (9.1% vs. 10.9%) sectors.

Five sectors are reporting a quarter-over-quarter increase in their net profit margins in Q1 2024 compared to Q4 2023, led by the Financials (17.7% vs. 13.1%) sector. On the other hand, six sectors are reporting a quarter-over-quarter decrease net profit margins in Q1 2024 compared to Q4 2023, led by Health Care (6.3% vs. 7.4%), Energy (9.6% vs. 10.7%), and Information Technology (25.5% vs. 26.5%) sectors.

It is interesting to note that analysts believe net profit margins for the S&P 500 will be above 12.0% for the rest of 2024. As of today, the estimated net profit margins for Q2 2024, Q3 2024, and Q4 2024 are 12.2%, 12.6%, and 12.5%, respectively.

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.