S&P 500 Sectors & Industries Profit Margins

S&P 500 Sectors & Industries Profit Margins (quarterly)

Yardeni Research, Inc.

December 10, 2021

Dr. Edward Yardeni

516-972-7683 eyardeni@

Joe Abbott

732-497-5306 jabbott@

Please visit our sites at blog.

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Table Of Contents Table Of Contents

S&P 500 Operating Profit Margins

S&P 500 Profit Margin

3-6

S&P 500 Sectors Forecasted & Actual Profit Margins

7-8

Communication Services

5-6

Consumer Discretionary

7-8

Consumer Staples

9

Energy

10

Health Care

11

Industrials

12

Information Technology

13

Materials

14

December 10, 2021 / S&P 500 Sectors & Industries Profit Margins

Yardeni Research, Inc.



S&P 500 Profit Margin

Figure 1.

16

14

S&P 500 PROFIT MARGIN (percent, quarterly)

12

16

14 Q3

12

10

10

8

8

6

6

4

4

2

2

0

0

-2

-2

S&P 500 Profit Margin

-4

Operating* (13.6)

-4

Reported** (12.6)

-6

-6

-8

-8

-10

-10



-12

-12

94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

* S&P 500 operating earnings per share (I/B/E/S data) divided by S&P 500 revenues per share. ** S&P 500 reported earnings divided by S&P 500 revenues per share.

Source: Standard & Poor's Corporation and I/B/E/S data by Refinitiv.

Figure 2.

14

S&P 500 PROFIT MARGIN 13 (percent, trailing four-quarter average)

14

Q3

13

12

12

11

11

10

10

9

9

8

8

7

7

6

6

5

5

4

4

3

Operating (13.1)

3

2

Reported (11.6)

2

1

1



0

0

94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Source: Standard & Poor's (revenues and reported EPS) and I/B/E/S data by Refinitiv (operating EPS).

Page 3 / December 10, 2021 / S&P 500 Sectors & Industries Profit Margins

Yardeni Research, Inc.



S&P 500 Profit Margin

Figure 3.

15

S&P 500 OPERATING PROFIT MARGIN (percent)

Quarterly (13.6)

Trailing four-quarter

10

average (13.1)

15 Q3

10

5

5



0

0

94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Source: Standard & Poor's Corporation (revenues) and I/B/E/S data by Refinitiv (operating EPS).

Figure 4.

15

S&P 500 REPORTED PROFIT MARGIN (percent)

10

15 Q3

10

5

5

0

0

Quarterly (12.6)

-5

Trailing four-quarter

-5

average (11.6)

-10

-10



-15

-15

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Source: Standard & Poor's Corporation.

Page 4 / December 10, 2021 / S&P 500 Sectors & Industries Profit Margins

Yardeni Research, Inc.



S&P 500 Profit Margin

Figure 5.

14

S&P 500 PROFIT MARGIN (percent, dividing forward earnings by forward revenues)

13

14

12/2

21

13

22

12

12

11

11

10

10

9

9

8

Consensus Forecasts

8

Annual

52-week forward* (13.3)

7

7



6

6

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

* Time-weighted average of the consensus estimates for current year and next year. Monthly through December 2005, then weekly. Source: I/B/E/S data by Refinitiv.

Figure 6.

14

S&P 500 PROFIT MARGIN MEASURES (percent)

13

14

Q132/2

13

12

12

11

11

10

10

9

9

S&P 500 Operating Profit Margins

Forward*

8

Actual (trailing 4Q average)

8

7

7

6

6



5

5

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

* Forward earnings divided by forward revenues. Source: I/B/E/S data by Refinitiv and Standard & Poor's.

Page 5 / December 10, 2021 / S&P 500 Sectors & Industries Profit Margins

Yardeni Research, Inc.



S&P 500 Profit Margin

Figure 7.

14

S&P 500 & PROFIT MARGIN

13

S&P 500 index (4701.2)

12

Operating trailing

4-quarter profit margin (13.1)

11

Q3 12/8

5250 4750 4250 3750

10

3250

9

2750

8

2250

7

1750

6

1250

5

750



4

250

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Source: Standard & Poor's Corporation and I/B/E/S data by Refinitiv.

Figure 8.

14

S&P 500 & FORWARD PROFIT MARGIN S&P 500 index (4701.2)

13 Forward profit margin (13.3)

12

11

12/2 12/8

5500 5000 4500 4000 3500

10

3000

2500 9

2000 8

1500

7 1000



6

500

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

* Time-weighted average of the consensus estimates for current and next year. Monthly through December 2005, weekly thereafter. Source: Standard & Poor's Corporation and I/B/E/S data by Refinitiv.

Page 6 / December 10, 2021 / S&P 500 Sectors & Industries Profit Margins

Yardeni Research, Inc.



S&P 500 Sectors Forecasted & Actual Profit Margins

Figure 9.

14

12 S&P 500

Operating Profit Margin* (trailing 4-quarter, %)

Q3

10

16

HEALTH CARE

S&P 500 Sectors Operating Profit Margins

14

Q3

12

8

Q3

10

6

8

4

S&P 500 (12.6)

2 95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 25

20

COMMUNICATION SERVICES

15

Q3

10

5 (16.9)

0

95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 25

14

12 CONSUMER DISCRETIONARY

Q3

10

8

Q3

6

4

(7.4)

2

0 95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 25

14

CONSUMER STAPLES

12

Q3

10

8

Q3

6

(7.4)

4

95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 25

15

10 ENERGY

Q3

5 Q3

0

-5

(9.4)

6

4 95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 25

14

INDUSTRIALS

Q3

12

10

Q3

8

6

(7.4)

4

2

95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 25

25

INFORMATION TECHNOLOGY

Q3

20

15 Q3

10

(22.7)

5

0

95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 25 14

MATERIALS

QQ33

12

10

8

6

4

(12.2)

2

0

95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 25 30

REAL ESTATE

25

(20.4)

Q3

20

15 Q3

10

-10

(2.9)

5

-15 95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 25

30

25 FINANCIALS

Q3

20

15 10

Q3

5

0

-5

Includes Real Estate

-10

through Q2-2016

(23.3)

-15 95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 25

0 95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 25

16

UTILITIES

Q3

14

Q3

12

10

8

(13.5)

6

4

95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 25

* Operating margin in percent and based on trailing 4-quarter EPS and sales. Source: Standard & Poor's.

Page 7 / December 10, 2021 / S&P 500 Sectors & Industries Profit Margins

Yardeni Research, Inc.



S&P 500 Sectors Forecasted & Actual Profit Margins

Figure 10.

14

12 S&P 500

Q3

10

8

Operating Profit Margin*

6

Actual 4Q Trailing

Implied Forward

4 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

20

17 COMMUNCATION SERVICES

Q3

14

11

8

5

13

HEALTH CARE

12

11

S&P 500 Sectors Forecasted & Actual Profit Margins

10 Q3

9

8

7 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

13

INDUSTRIALS

11 12/1

9

Q3

7

5

2 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

13

11 CONSUMER DISCRETIONARY

9

7

Q3

5

3

3 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

30

INFORMATION TECHNOLOGY

25 Q3

20

15

10

1 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

8.5

8.0 CONSUMER STAPLES

7.5

Q3

7.0

6.5

6.0

5 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

15

MATERIALS

Q3

12

9

6

3

5.5 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

25

20 ENERGY

15

10

5

Q3

0

-5

-10

-15 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

40

30 FINANCIALS

20

Q3

10

0

Includes Real Estate

-10

through Q2-2016

-20 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

0 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

30

REAL ESTATE

25

Q3

20

15

10

5 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

16

UTILITIES

Q3

14

12

10

8

6

06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

* Actual from S&P based on trailing 4-quarter EPS and sales. Forecast implied from I/B/E/S consensus forward EPS and sales, and pushed one year ahead. Source: Standard & Poor's Corporation (trailing 4-quarter margin) and I/B/E/S data by Refinitiv (forward margin).

Page 8 / December 10, 2021 / S&P 500 Sectors & Industries Profit Margins

Yardeni Research, Inc.



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