A report from Deutsche Bank has shed light on global earnings, especially focusing on the S&P 500 and regional trends. While there was a modest slowdown in global earnings growth, declining from 9.2% in the fourth quarter to 7.1% in the first quarter of the year, growth remains in a healthy range for 2024. The S&P 500 showed resilience with a year-over-year growth of 9.8% in Q1, down from the previous quarter’s 13.5%.
The analysis indicated that earnings beats were higher than average globally, with the overall magnitude of these beats surpassing historical standards. Excluding the Energy sector, which faced negative growth across all regions, global earnings growth for Q1 reached 10%, marking the sixth straight quarter of double-digit growth. Regionally, Japan, the United States, and Emerging Markets (EM) continued to display strong growth, while Europe struggled with stagnant growth near zero.
Despite Europe’s ongoing challenges, the first quarter of 2025 showed a slight increase in earnings levels, contrasting with a small decline in the United States. This improvement may signal a turning point for Europe, which has faced nearly two years of poor performance. Looking ahead, consensus estimates for Q2 have seen significant downgrades outside of EM.
Europe faced the largest cut at 6%, with similar downgrades for Japan and the United States. Forecasts for 2025 have also been revised downward, except for EM, which has remained relatively stable due to upward adjustments in India, Taiwan, and Korea counterbalancing cuts in China, EMEA, and Latin America. The outlook for 2025 suggests Europe will lag with expected earnings growth of just 2.3%.
In contrast, EM is anticipated to lead at 10.4% growth, followed by the United States at 7.1% and Japan at 6.1%.