Zacks Earnings Trends Highlights: Netflix and Johnson & Johnson

For Immediate ReleaseChicago, IL – January 23, 2025 – Zacks Director of Research Sheraz Mian says, "Total earnings for the 62 S&P 500 companies that have reported results are up +19.6% from the same period last year on +8.4% higher revenues."Earnings Picture Remains Strong: A Closer LookNote: The following is an excerpt from this week’sEarnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>Here are the key points:The picture emerging from the 2024 Q4 earnings season is one of strength and improving outlook, with the companies not only coming ahead of estimates but also providing reassuring guidance for the coming quarters.Total earnings for the 62 S&P 500 companies that have reported results are up +19.6% from the same period last year on +8.4% higher revenues, with 82.3% beating EPS estimates and 69.4% beating revenue estimates.The earnings and revenue growth pace for the companies that have reported Q4 results represents a significant improvement over what we had seen in other recent periods. With respect to the Q4 beats percentages, the EPS beats percentage is tracking modestly above the average for the preceding 20 periods, while the revenue beats percentage is a hair below the 20-quarter average.For the Finance sector, we now have Q4 results for 41.3% of the index’s market capitalization in the S&P 500 index. Total earnings for these companies are up +26.2% from the same period last year on +10.9% higher revenues, with all the companies beating EPS estimates and 77.3% beating revenue estimates. This is notably better performance from these banks relative to other recent periods.If actual 2025 earnings results turn out to be as currently expected, this will be the first time since 2018 when all 16 Zacks sectors achieved positive earnings growth (to be precise, the Zacks Autos sector had modestly negative earnings growth in 2018). Notable Earnings ResultsOf the latest earnings releases, the blockbuster Netflix NFLX release contrasts with the underwhelming guidance in the Johnson & Johnson JNJ report.Netflix has truly become the streaming leader, with the ad-supported subscription tier adding to the company’s growth. The high-margin advertising revenue benefits Netflix’s margins, as the roughly doubling of Q4 earnings relative to the year-earlier period shows. Netflix shares were up more than +75% over the past year before the awe-inspiring numbers, with the earnings results and price-hike announcements pushing them to a new all-time high.Johnson & Johnson shares were struggling before the Q4 earnings release, with the stock down -9.7% over the past year, significantly underperforming the Zacks Medical sector as well as the broader market. The company beat top- and bottom-line estimates, but the full-year 2025 revenue guidance is below the current Zacks revenue consensus.Tech to Remain a Key Growth DriverThe Tech sector has been a significant growth driver in recent quarters, and the trend is expected to continue in 2024 Q4 and beyond. For Q4, Tech sector earnings are expected to be up +14.9% from the same period last year on +10.1% higher revenues, the 6th quarter in a row of double-digit earnings growth.This would follow the sector’s +22.6% earnings growth on +11% higher revenues in 2024 Q3. The sector’s growth trajectory is expected to continue in the coming quarters.In addition to the Tech sector’s strong growth profile, the sector is also among the few sectors whose earnings outlook is steadily improving. This shows up in the revisions trend for the Tech sector for both Q4 and full year 2025.The Earnings Big PictureThe expectation is for double-digit earnings growth in each of the next two years, with the number of sectors enjoying strong growth notably expanding from the narrow base we have been seeing lately.In fact, 2025 is expected to have all 16 Zacks sectors enjoy earnings growth, with 8 of the 16 Zacks sectors expected to produce double-digit earnings growth. Unlike the last two years, when the Mag 7 group drove all or most of the aggregate earnings growth, we will have double-digit S&P 500 earnings growth in 2025, even without the contribution from this mega-cap group.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comZacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.1% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Johnson & Johnson (JNJ): Free Stock Analysis Report Netflix, Inc. (NFLX): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks