S&P 500 Q4 2022 Earnings Forecast Drops Amid Market Challenges
As nearly 90% of S&P 500 companies report, analysts lower Q4 2022 earnings estimates and adjust 2023 outlooks due to economic pressures.
Following the release of third-quarter results from the majority of S&P 500 companies, market analysts are shifting their focus toward the earnings outlook for the fourth quarter of 2022 and the broader expectations for 2023.
Approximately 90% of the S&P 500's market capitalization has reported earnings, revealing a modest 3% beat over analyst estimates for Q3—an unusually low margin. This has prompted a more cautious stance as rising interest rates and decelerating economic growth are expected to weigh on corporate profits going forward.
Projections for 2023 have also been revised downward. Goldman Sachs recently adjusted its forecast for S&P 500 earnings per share (EPS) growth in 2023 to zero, highlighting concerns over shrinking profit margins. Over the past six months, EPS estimates have dropped by 15%, according to FactSet data.
For Q4 2022, analysts now anticipate a 0.4% decline in year-over-year earnings for S&P 500 companies, a significant revision from the 5.8% growth predicted as recently as October 1, based on IBES data.
The last quarterly earnings contraction for the S&P 500 occurred in Q3 2020, during the early stages of the COVID-19 pandemic when businesses faced unprecedented disruptions.
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