LIVE MARKETS-Tech leads lofty first-quarter earnings expectations

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TECH LEADS LOFTY FIRST-QUARTER EARNINGS EXPECTATIONS

As the clock ticks down to mark the end of a volatile first quarter, the time is ripe to turn our gaze to the January-March earnings season, which should kick into gear in about two weeks when big banks step up to the plate.

To begin with, a total of 124 companies in the S&P 500 have offered some kind of pre-announcement. Of those, 61 have been positive, 10 have been in line with expectations, and 53 have been negative, resulting in a negative/positive ratio of 0.9, a touch more positive than Q4 2005 and a solid improvement over Q1 2025's N/P ratio of 2.3, according to LSEG.

Analysts currently expect, on aggregate, S&P 500 earnings growth of 14.3% year-on-year, comparable to Q4 2025's 14.1%, per LSEG.

By sector, tech .SPLRCT is projected to be the biggest winner, notching annual earnings growth of 46.3%. Tech is followed by materials .SPLRCM and financials .SPSY, which are expected to post year-on-year earnings growth of 23.1% and 17.5%, respectively.

On the other end of the scale, healthcare .SPXHC and communication services .SPLRCL are seen reporting annual earnings declines of 8.7% and 2.2%, respectively.

Market participants, as always, are likely to pay at least as much attention to the conference calls and forward projections as they are to backward-looking quarterly results. Any commentary regarding anticipated impacts from soaring oil prices/supply chain stress arising from the Iran war, as well as tangible returns (or lack thereof) on massive investments in artificial intelligence, are likely to be of particular interest.

Here's a look at past and projected annual earnings growth by sector, courtesy of LSEG.

(Stephen Culp)

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