US Corporate Profit Run Continues as S&P 500 Q3 Net Income Estimate Rises 2.2%

US companies, unlike their South Korean counterparts, saw third-quarter earnings estimates move higher this year, driven by sharply higher profit forecasts for the energy and information technology sectors since the end of June.

According to FactSet data released on October 5, estimated third-quarter net income for companies in the S&P 500 stood at $800.8 billion at the end of September. That was up 2.2% from the $783.4 billion projected at the end of June, three months earlier.

The energy sector posted the sharpest increase. Estimated third-quarter net income for the sector rose 19.4% over the period, to $56.1 billion from $47 billion, the biggest gain among the index's 11 sectors. The increase came as international oil prices surged amid the continuing war between the US and Iran. Earnings-per-share estimates for refiners including Marathon Petroleum and Valero Energy nearly doubled.

Estimated third-quarter net income for the IT sector also rose, increasing 5.1% to $259.5 billion from $247 billion. Of the sector's 74 companies, 61 saw their EPS estimates revised higher, led by Nvidia and Micron. Third-quarter profit estimates for the financial sector also increased 1.6%, to $123.3 billion at the end of September from $121.3 billion at the end of June.

Reuters reported that third-quarter profit for S&P 500 companies likely rose more than 30% from a year earlier, but said a sharp rise in interest rates remains the most direct threat to the stock market. Higher rates weigh on equity valuations and raise corporate borrowing costs.

Oh Hyun-a, Hankyung.com reporter 5hyun@hankyung.com