Corporate America’s profit machine kept churning this quarter
The crude-oil sell-off hurt. But the numbers were still good.
The Q3 earnings season is nearly done and dusted, with Walmart’s report in the bag today.
Results from big retailers — Target comes tomorrow — are traditionally are seen as more or less the end of the earnings crucible, though late reporter Nvidia’s numbers after the close Wednesday have understandably assumed a new prominence as the symbolic end of the earnings parade.
All told, the earnings results are what we thought they were: a slowdown from the breakneck pace of Q2, but nothing drastic.
They were up about 5%, and just a smidge better than the expected 4%. (They almost always are better than expected, due to corporate executives’ tendency to underpromise and overdeliver in order to help engineer a favorable share-price reaction.)
The giant profits produced by companies in the S&P 500 information-technology sector — buoyed by Apple, Microsoft, and Broadcom — and communication-services sector — which includes Alphabet and Meta — have been the key contributors to bottom-line growth this quarter.
Meanwhile, the downturn in crude-oil prices and energy-sector profits has been the drag on results in Q3. US crude dropped nearly 25% from where it was in September 2023, and Q3 earnings shrank roughly 25% for companies in the S&P 500 energy sector compared to the same period in 2023.
Of course, given the insane scale of Nvidia’s bottom line, the chipmaker’s report will make a mark on the final numbers for the index.
