Despite war and consumer anxiety, big American companies are piling up profits, driven by healthy sales growth and improved margins.
With earnings growth exceeding 13% for the sixth quarter running, Wall Street's expectations suggest that U.S. companies are far healthier than wider economic concerns might indicate.
Even some airlines, slammed by jet-fuel shortages and fuel prices driven up by the Iran war, are thriving, with United Airlines Holdings' profit rising 80% from the first quarter of last year.
Business travel is up 25% in recent weeks, and the airline expects travel demand to stay strong enough that it can raise fares as much as 20%.
For much of the S&P 500, margins are improving, and the gap between profit and sales growth remains below late-2024 highs, suggesting real expansion behind much of the profit growth.
Rising earnings are getting the smallest assist from share buybacks that they have in many quarters, and earnings growth is expected to reach 48% for tech companies, with revenue rising 28%.
However, earnings growth at consumer companies in the first quarter is expected to lag behind the rest of the S&P 500, at 2.4% for the consumer-discretionary sector and 3.4% for consumer staples.
Overall consumer spending appears robust, with American Express reporting cardholder spending was up 9% in the first quarter, to a three-year high.
