In our July 26 update, we saw that large companies (those in the S&P 500) were reporting revenue and net income for Q2 2024 higher than the year-earlier period, while smaller firms (those outside the S&P 500) reported slightly lower revenue and net income. At the time, however, only 788 firms had reported at all, and most of that number were large firms (because the S&P 500 have earlier filing deadlines). 

This week we’re up to more than 1,700 firms, and most are now smaller firms. So what does the Earnings Tracker tell us now? 

As of Friday, Aug. 2, the revenue gap for smaller firms disappeared: revenue for Q2 2024 is now up 3.45 percent compared to Q2 2023. That’s not as good as the revenue increase for large firms (up 4.74 percent), but at least it’s a positive number. 

Net income, however, is an uglier story; it is now down 10.3 percent for small firms compared to the year-earlier period, while net income for large firms is up 12.1 percent. 

As usual, we also have the data in charts. Figure 1, below, tells the tale for revenue across various groups: large versus small, financial firms versus non-financial, and so forth.

Figure 2, below, does the same for net income. The bar charts give the comparison in absolute dollar numbers (the left-side vertical axis), while the gray line is the percentage change (the right-side vertical axis).

The numbers do help to put recent market events into context. For example, if a great number of small companies out there are suffering through declines in net income, that will ultimately lead to lower share price — which certainly squares with the market sell-off Wall Street saw last week. Yes, lots of that sell-off was probably driven by panic selling, but a broad-based decline in net income growth could presage a sluggish market for quarters to come.

We will continue to update our earnings tracker at the end of every week for the next few weeks, as quarterly reports flood into the database. 

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