Seven of the S&P 500's 11 sectors are expected to achieve cumulative year-over-year growth in normalized earnings per share among their constituent companies in fourth-quarter 2024 earnings results, according to an analysis of S&P Global Market Intelligence data.

Companies categorized within the S&P 500's communication services sector are forecast to record the largest cumulative year-over-year EPS gain with a 23.8% increase in the fourth quarter. The sector includes mega-cap technology companies such as Alphabet Inc. and Meta Platforms Inc. as well as several media and telecommunications conglomerates. The real estate sector is expected to post the second-largest year-over-year EPS increase, bouncing back from a 0.1% decrease in the third quarter.

The energy sector is again projected to see the largest cumulative year-over-year drop in EPS for the second straight quarter, falling 29.8% in the fourth quarter after a 25.5% decline in the third quarter. Other sectors expected to show EPS losses include industrials, materials and consumer staples.

Cumulative EPS for all S&P 500 companies in the fourth quarter could increase by about 8.6% year over year, outpacing the 7.0% gain in the third quarter. The index's companies began reporting earnings for the 2024 fourth quarter on Jan. 15 with releases from JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and Goldman Sachs Group Inc.

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Largest EPS gains, losses

Merck & Co. Inc. is poised to report the biggest year-over-year improvement in EPS among all S&P 500 constituents, according to early analyst predictions as of Jan. 10. The New Jersey-based pharmaceutical company said Jan. 8 that one of its vaccine products was the first to receive approval in China for the prevention of certain HPV-related cancers and diseases in males.

Medical and specialty insurance provider Humana Inc. is forecast to post the largest year-over-year EPS decrease with analysts expecting a loss per share over $2.00 for the fourth quarter. The company's share price fell 14.40% during December 2024 and plunged 46.03% over 2024.

'Magnificent 7' performance

EPS improvement is anticipated from all of the mega-cap companies collectively known as the "Magnificent Seven," a group of technology and tech-adjacent stocks with more than $1 trillion each in market capitalization as of Jan. 15. The stock group largely drove the S&P 500's gains in 2024.

Analysts predict NVIDIA Corp. will lead the group with fourth-quarter EPS surging 63.9% year over year on an estimated 72.1% revenue increase.

Apple Inc., the largest S&P 500 company by market capitalization, could see EPS rise 8% year over year in the fourth quarter.

Within the mega-cap group, Tesla Inc. and Microsoft Corp. may report the slimmest year-over-year EPS improvements, each with an increase of about 7%, according to analyst predictions.