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.

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