Zacks Earnings Trends Highlights: Walmart and Delta Air Lines

For Immediate ReleaseChicago, IL – April 10, 2025 – Zacks Director of Research Sheraz Mian says, "Total 2025 Q1 earnings for the S&P 500 index are expected to be up +5.8% from the same period last year on +3.8% higher revenues. But that's not the main story."Guidance Will Be Key This Earnings SeasonNote: The following is an excerpt from this week’s Earnings 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 Q1 earnings season will be less about what companies earned in the first quarter of 2025 and more about sizing up the earnings impact of the emerging tariff and macroeconomic backdrop. Pre-announcements and guidance from some of the early reporting companies suggest that most companies may be forced to withdraw or lower their earlier guidance given the tariff-induced uncertainty.Guidance is always the most important aspect of any earnings season, but it will be an even more significant part of the Q1 reporting cycle.Total 2025 Q1 earnings for the S&P 500 index are expected to be up +5.8% from the same period last year on +3.8% higher revenues, which would follow the +14.1% earnings growth on +5.7% revenue growth in the preceding period.Concerning year-over-year earnings growth, 8 of the 16 Zacks sectors are expected to enjoy positive earnings growth, with Medical (+33.6% growth), Utilities (+15.0%), Transportation (+8.6%), and Tech (+12.5%) as the major growth drivers.Earnings Outlook Gets Cloudy as Uncertainty HitsThe guidance headlines from Walmart WMT and Delta Air Lines DAL are a sign of things to come as we head into the Q1 earnings season. The magnitude of uncertainty is so high that most management teams that already provide explicit guidance will likely either withdraw the outlook altogether or lower the bound of their guided range.You would recall that back in January, at the time of its 2024 Q4 earnings release, Delta expected this year to be a new company record. Delta had walked some of the earlier bullishness back in its early March pre-announcement when it noted a decelerating trend in corporate sales; they have now withdrawn the full-year outlook.Walmart’s lower earnings guidance for the current quarter (fiscal quarter ending in April) reflects ‘price investments’ and an unfavorable merchandise mix, both reflecting the impact of tariffs and consumer spending. We had been seeing this in the revisions trend already, with estimates steadily coming down.Tech Remains a Growth DriverThe Tech sector has been a significant growth driver in recent quarters, and we saw the same trend at play in 2024 Q4. For Q1, Tech sector earnings are expected to be up +12.5% from the same period last year on +10.2% higher revenues, the 7th quarter in a row of double-digit earnings growth.This would follow the sector’s +26.4% earnings growth on +11.4% higher revenues in 2024 Q4.The Tech sector has also been among the few sectors that have steadily enjoyed an improving earnings outlook, with estimates increasing steadily over the past year. However, the more recent data on this count shows a shift in the revisions trend, with estimates for Q1 modestly under pressure since January.The Earnings Big PictureTotal S&P 500 earnings for the current period (2025 Q1) are currently expected to be up +5.8% from the same period last year on +3.8% higher revenues. Estimates for the period came down since the quarter got underway.We saw a broad-based negative revisions trend for Q1 and are starting to see a similar trend at play for Q2 and beyond as well.The 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.However, we should keep in mind that these expectations will most likely be adjusted downward as the effects of slowing U.S. economic growth and tariffs begin to be reflected in diminished corporate profitability. We are already starting to see that downshift in estimates, which will likely accelerate as we go into the heart of the Q1 reporting cycle.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% 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 +23.9% 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 Delta Air Lines, Inc. (DAL): Free Stock Analysis Report Walmart Inc. (WMT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks