CFO Slice

Large U.S. companies are delivering strong profit and revenue growth despite geopolitical tensions and weak consumer sentiment, with S&P 500 earnings per share expected to rise more than 13% year over year for a sixth consecutive quarter. Results indicate broadening earnings growth beyond technology and financial sectors, supported by solid sales expansion and improving margins, with revenue growth at its strongest level since late 2022. Profit gains are increasingly driven by genuine business performance rather than share buybacks, which are contributing less to earnings growth than in recent periods. Sector performance remains uneven: technology is leading with expected earnings growth of 48%, while financials and materials are also outperforming, whereas consumer-facing sectors are lagging, reflecting subdued household demand. Energy earnings are currently down year over year but supported by volatile oil prices and supply concerns. Despite record-low consumer sentiment driven by high energy costs, geopolitical risks, and economic uncertainty, spending remains resilient in some areas, particularly among higher-income consumers, with strong growth in travel and luxury categories. This divergence highlights a “K-shaped” economy, where larger and more diversified companies continue to outperform smaller and more consumer-exposed businesses.