Earnings Season Wraps Up: US CEOs Signal Highest Confidence in Two Years

by Christine Short of Wall Street Horizon, 2/28/25

Takeaways

  • The Q4 2024 earnings season tapers off from here, with S&P 500® EPS growth surpassing 17%, the highest in 3 years

  • Large cap outlier earnings dates this week include: Diamondback Energy (FANG), Realty Income Corp (O), FirstEnergy (FE) and The Mosaic Company (MOS)

  • This is the final week of peak season, with 2,530 companies expected to report

The fourth quarter 2024 earnings season more-or-less wraps up this week with the final trickle of retailers coming in, as well as the highly anticipated report from Nvidia which was out yesterday afternoon. At this point, roughly 90% of S&P 500 companies have reported results for Q4, showing YoY EPS growth of 17% and revenue growth just over 5%.1

Tuesday's Q4 results from Home Depot surprised investors with a slight beat on both the top and bottom-line.2 This comes after a Q3 earnings call during which management commented on the slowing of the US consumer who seemed to be deferring large ticket home improvement projects.3 The outlook was more positive on this call, with the company’s CFO, Richard McPhail, anticipating consumers will stop putting off projects as they begin to accept higher interest rates as the norm.4

The home improvement retailer’s results come at a time when the US housing market is struggling. Last Wednesday, US Housing Starts for January slid to an annualized 1.366M, a nearly 10% decline MoM.5 Many things likely contributed to the decline, including severe weather around the country that delayed construction, rising material costs due to import tariffs and stubbornly high mortgage rates. Despite this, home prices continued to rise higher according to the latest reading of the S&P Case-Schiller Index which showed an increase of 3.9% in December, the 19th consecutive monthly increase.6

Recent readings on the US consumer have also confirmed there is uncertainty in the air. The University of Michigan Consumer Sentiment reading for February slid nearly 10% MoM, the second consecutive monthly decline.7 The survey found that 40% of those surveyed were concerned about tariffs and the possibility that they would reignite inflation.8 The February reading on consumer confidence from The Conference Board showed the same, with the index slipping nearly 7% MoM, the largest monthly drop since August 2021.9

This most certainly impacts retailers that started reporting last week. WalMart, after beating expectations on the top and bottom-line for Q4, issued a warning about waning growth in 2025.10 TJX Companies, the parent company of off-price retailers such as TJMaxx, Home Goods and Marshall’s also showed robust growth in the final quarter of 2024, but issued weaker-than-expected same store sales guidance for its fiscal 2026.11 Dollar stores, such as Dollar Tree, which doesn’t report until mid-March, has already announced they would likely have to discontinue carrying certain items that are made in China and may also raise prices to combat the impact of tariffs. Roughly 40% of Dollar Tree’s goods are derived from overseas.12

To top off the week, AI darling Nvidia reported yesterday afternoon, beating sell side expectations on both the top and bottom-line. Revenue of $39.3B was a quarterly record for the company, as was yearly revenue of $130.5B, a 114% increase over 2023. Despite worries around the emergence of Chinese AI company DeepSeek, NVDA guided for sales of $43 billion in Q1, stronger than the Wall Street estimate of $41.78B.13