At this late stage of the earnings season, the (blended) revenue growth rate for the S&P 500 for Q4 is 9.0%. If 9.0% is the actual growth rate for the quarter, it will mark the highest revenue growth rate reported by the index since Q3 2022 (11.0%). At the sector level, ten of the eleven sectors are reporting year-over-year revenue growth. Three of these ten sectors are reporting double-digit revenue growth: Information Technology, Communication Services, and Health Care.
However, the Q4 revenue growth rate for the S&P 500 has been increasing over a longer timeframe. On September 30, the estimated revenue growth rate for Q4 was 6.5%. On December 31, the estimated revenue growth rate for Q4 was 7.8%. Today, the (blended) revenue growth rate is 9.0%. Which sectors and companies have been the largest contributors to the increase in the Q4 revenue growth rate for the S&P 500 since December 31?
At the sector level, the Information Technology, Health Care, Communication Services, and Industrials sectors have been the largest contributors to the increase in the revenue growth rate for the S&P 500 since December 31.
In the Information Technology sector, the positive revenue surprises reported by Apple ($143.76 billion vs. $138.39 billion), Super Micro Computer ($12.68 billion vs. $10.42 billion), and Microsoft ($81.27 billion vs. $80.31 billion) have been substantial contributors to the increase in the revenue growth rate for the index since December 31. As a result, the blended revenue growth rate for the Information Technology sector has increased to 20.6% from 17.9% over this period.
In the Health Care sector, the positive revenue surprises reported by Cigna Group ($72.50 billion vs. $70.31 billion), CVS Health ($105.69 billion vs. $103.70 billion), Eli Lilly & Company ($19.29 billion vs. $17.94 billion), and Centene Corporation ($49.73 billion vs. $48.39 billion) have been significant contributors to the increase in the revenue growth rate for the index since December 31. As a result, the blended revenue growth rate for the Health Care sector has increased to 10.3% from 9.0% over this period.
In the Communication Services sector, the positive revenue surprises reported by Alphabet ($113.83 billion vs. $111.32 billion) and Meta Platforms ($59.89 billion vs. $58.46 billion) have been substantial contributors to the increase in the revenue growth rate for the index since December 31. As a result, the blended revenue growth rate for the Communication Services sector has increased to 12.2% from 10.2% over this period.
In the Industrials sector, the positive revenue surprises reported by Boeing ($23.95 billion vs. $22.60 billion), RTX Corporation ($24.24 billion vs. $22.69 billion), and Caterpillar ($19.13 billion vs. $17.85 billion) have been significant contributors to the increase in the revenue growth rate for the index since December 31. As a result, the blended revenue growth rate for the Industrials sector has increased to 7.8% from 5.8% over this period.
Outside of these four sectors, the positive revenue surprises reported by Apollo Global Management ($9.86 billion vs. $4.77 billion), Phillips 66 ($36.33 billion vs. $33.86 billion), Amazon.com ($213.39 billion vs. $211.44 billion), and Ford Motor ($45.90 billion vs. $43.60 billion) have also been substantial contributors to the increase in the revenue growth rate for the S&P 500 for Q4 since December 31.
It is interesting to note that analysts believe the S&P 500 will report lower revenue growth starting in Q1 2026. For Q1 2026 through Q4 2026, the estimated (year-over-year) revenue growth rates for the S&P 500 are 8.7%, 7.9%, 7.3%, and 7.4%, respectively.
The FactSet Earnings Insight report will not be published on February 20. The next edition of the report will be published on February 27.
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.