What Oil Shock? S&P 500 Estimates Keep Rising.

• Of 110 S&P 500 companies issuing Q1 guidance, 59 gave positive earnings outlooks (above historical averages) while only 51 issued negative guidance (the lowest since Q4 2021)
• Technology sector leads with 33 companies issuing positive EPS outlooks and an 8.6% increase in estimates, with notable jumps for Micron (from $8.21 to $12.20) and Sandisk (from $3.57 to $4.93)
• Energy sector earnings estimates surged 8% as oil prices climbed, with Exxon Mobil's average EPS estimate rising from $1.67 to $1.84, accounting for much of the sector's improvement

Market Summary: S&P 500 Earnings Resilient Despite Oil at $100

Key Findings:

S&P 500 companies continue showing robust earnings growth despite crude oil reaching $100 per barrel and ongoing Iran-related conflicts. First-quarter earnings are projected to climb 13.2% year-over-year, marking the sixth consecutive quarter of double-digit growth, according to FactSet. Notably, this estimate increased from 12.8% on December 31, even as markets experienced an extended slump.

Corporate Guidance:

Of 110 S&P 500 companies issuing Q1 guidance, 59 provided positive earnings outlooks—above five-year and ten-year averages. Only 51 issued negative guidance, the lowest count since Q4 2021, suggesting companies aren't anticipating significant disruption from elevated fuel prices.

Sector Performance:

Earnings growth is concentrated in two sectors:

• Technology: Leading with 33 companies issuing positive outlooks; estimates rose 8.6% over three months
• Energy: Estimates jumped 8% as oil prices surged; Exxon Mobil's average EPS estimate increased from $1.67 to $1.84
• Financials: Modest 0.4% estimate improvement

Notable Company Revisions:

• Micron (MU): EPS estimate surged from $8.21 to $12.20
• Lumentum Holdings: Estimates increased from $1.54 to $2.24
• Palantir Technologies: Rose from $0.21 to $0.28
• Nvidia: $1.66 to $1.76
• Apple: $1.83 to $1.95

Revenue Outlook:

All 11 S&P 500 sectors project Q1 revenue growth at 9.7% year-over-year—the strongest performance since Q3 2022's 11% increase, up from the 8.2% estimate on December 31.