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Off The Charts-Profit Broadening
FILE - Pedestrians walk past the Nasdaq building Tuesday, March 26, 2024, in New York. Last year, a handful of Big Tech stocks were behind much of corporate America’s profit growth. Now, as the heart of earnings reporting season arrives on Wall Street, the hope is that profit growth will broaden out to a wider range of companies. (AP Photo/Frank Franklin II, File)

As earnings season rolls into its heart, hopes rise for broader gains

Last year, a handful of Big Tech stocks were behind much of corporate America’s profit growth

By STAN CHOE
Published - Apr 18, 2024, 08:18 AM ET
Last Updated - Apr 18, 2024, 08:18 AM EDT

NEW YORK (AP) — As the heart of earnings reporting season arrives on Wall Street, investors hope that many more voices will be joining the chorus of companies reporting stronger profits.

Last year, Big Tech stocks were behind much of corporate America’s profit growth, and thus behind the majority of the gain for the S&P 500. Just seven companies accounted for all of the U.S. market’s profit expansion over the last four quarters, according to UBS.

But as defense contractors and other big industrial companies line up to report their latest results, the hope is that profit growth will broaden out to a wider range of companies.

Consider General Dynamics, which reports results Wednesday. Analysts forecast its earnings per share jumped nearly 12% from a year earlier, according to FactSet. That would be a big acceleration from last year’s first-quarter growth of roughly 1%. The company is expected to benefit from solid demand for its Gulfstream business jets and from European defense agencies.

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