NEW YORK- US companies are on track to post earnings growth for the fourth quarter of 2020, data from Refinitiv showed on Wednesday, which would defy expectations for profits to drop 10 percent due to the pandemic.
If the current projection holds, it would be the first quarter of profit growth for S&P 500 companies since the end of 2019.
Based on results from 223 companies and estimates for the rest, S&P 500 earnings are expected to have risen 0.9 percent in the fourth quarter of 2020 from a year ago.
At the start of the month, analysts had been expecting a 10.3 percent decline in fourth-quarter earnings from a year earlier, per Refinitiv’s data, following a year of weakness due to the impact of the coronavirus pandemic.
Upbeat fourth-quarter results would bolster expectations for a strong rebound in earnings in 2021 and help to ease investor worries that valuations are overstretched.
US stocks have risen to record highs even as the pandemic has raged, largely because of optimism the economy would improve with the rollout of vaccines.