Guidance to be Key Factor This Earnings Season

Core Viewpoint - The earnings outlook for Q1 is becoming increasingly uncertain, with companies like Walmart and Delta Air Lines adjusting their guidance downward or withdrawing it altogether due to macroeconomic factors and tariffs [2][3][4]. Company-Specific Insights - Delta Air Lines had initially expected a record year but has since withdrawn its full-year outlook due to a deceleration in corporate sales [3]. - Walmart's lowered earnings guidance for the current quarter is attributed to 'price investments' and an unfavorable merchandise mix, influenced by tariffs and consumer spending trends [4]. Sector Performance - The Tech sector continues to be a significant growth driver, with Q1 earnings expected to rise by 12.5% year-over-year, following a 26.4% growth in Q4 2024 [5][6]. - Despite the overall positive outlook for the Tech sector, recent data indicates a shift in the earnings estimate revisions trend, with Q1 estimates facing modest pressure since January [8]. Overall Earnings Trends - Total earnings for the S&P 500 in Q1 2025 are projected to increase by 5.8% compared to the same period last year, with revenues expected to rise by 3.8% [7][12]. - Eight out of sixteen Zacks sectors are anticipated to experience positive earnings growth, with Medical, Utilities, Transportation, and Tech being the primary contributors [7]. - A broad-based negative revisions trend is emerging for Q1 and is expected to continue into Q2 and beyond, reflecting the impact of slowing economic growth and tariffs on corporate profitability [13][18].