US fourth-quarter 2024 earnings growth set to be highest in three years

By Caroline Valetkevitch

NEW YORK (Reuters) - S&P 500 earnings growth for the fourth quarter of 2024 is on track to be the highest since the end of 2021, according to LSEG, thanks to much stronger-than-expected results in communication services, financials and other sectors.

With reports in from nearly 70% of the S&P 500 companies as of Wednesday, fourth-quarter earnings are estimated to have risen 15.1% from a year earlier, up from an estimate of 9.6% growth at the start of January, based on data compiled by LSEG.

Fourth-quarter 2024 growth is set to be the highest quarterly earnings increase for the S&P 500 since the fourth-quarter of 2021, said Tajinder Dhillon, senior research analyst, analytics, at LSEG Data & Analytics. Growth for the 2021 quarter was 32.1%, he said, amid a bounceback from COVID-19 pandemic weakness.

The S&P 500 communication services sector, which includes companies such as Meta Platforms, is leading estimated fourth-quarter earnings gains among sectors, with year-over-year growth of 32.2%.

That's followed by financials, with estimated growth of 29.9%, and consumer discretionary, with 24.8%, based on LSEG data.

"Earnings are holding up because the U.S. consumer is strong," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.

Results have helped to support the stock market despite worries that the Federal Reserve may not cut interest rates anytime soon and uncertainty over the impact of tariffs from the Trump administration.

"At the end of the day, the stock market is about those 500 companies in the S&P 500 - their earnings, their dividend policy and growth trajectory. That is actually what defines a market," Dollarhide said.

(Reporting by Caroline Valetkevitch; Editing by Leslie Adler)