Report Summary Preface: This week's report focuses on the Q4 earnings performance of U.S. stocks. On one hand, a significant number of U.S. companies reported their financial results in the final week of January. On the other hand, the impact of exports on corporate profits is increasing, prompting us to supplement our analysis with earnings data from U.S.-listed companies to enhance our observation of export trends. Overall, U.S. corporate profit growth remains robust, but significant structural divergence exists. In the fourth quarter, the profit growth rate for the disclosed S&P 500 constituents was 10.8%, lower than the 24.1% recorded in the third quarter. According to WIND's industry classification, 7 out of 11 primary sectors experienced negative profit growth. Within the non-financial sectors, only three posted positive profit growth, including Information Technology, Industrials, and Utilities.
Overall Situation: Profit Growth Shows a Decline As of February 1st, 180 constituents of the S&P 500 had disclosed their Q4 reports (Note: U.S. companies have non-uniform fiscal years; this is marked by calendar time, referring to earnings reports primarily corresponding to Q4 2025). These 180 stocks represent approximately half of the S&P 500's total market capitalization. In terms of quarterly profit growth, the sample of U.S. companies achieved a growth rate of 10.8% in Q4, which is lower than the 24.1% seen in Q3 2025. However, compared to historical growth rates, this level remains relatively high.
Sector Breakdown: Significant Divergence, Three Sectors Show Higher Prosperity A sectoral analysis, based on Wind's industry classification, reveals that in Q4 2025, 7 out of 11 sectors experienced negative profit growth. Only four sectors—Information Technology, Financials, Industrials, and Utilities—registered positive profit growth. Among these, the Information Technology sector stood out with a Q4 profit growth rate of 44.5%, contributing 12.6 percentage points to the overall sample's profit growth. This indicates that U.S. stock performance is primarily supported by the Information Technology sector.
(1) Information Technology: Majority of Stocks Show Rapid Earnings Growth Within the Information Technology sector, 25 companies have disclosed Q4 reports. Among them, 21 reported positive profit growth, with 18 achieving growth rates exceeding 10%. Strong performers include SanDisk (672% growth in Q4), Western Digital (210%), Micron Technology (180.2%), Broadcom (97%), and Oracle (94.7%).
(2) Utilities: Possibly Linked to Rising Electricity Prices The Utilities sector demonstrated strong Q4 performance, with the combined profit growth of two sample enterprises reaching 251.1%. U.S. electricity price data shows a consistent year-on-year increase throughout 2025, with the CPI for Electric Utility Services rising 6.7% year-on-year in December.
(3) Industrials: Possibly Related to Accelerating Defense Production The Industrials sector reported a profit growth rate of 45.9% for Q4. Notably, defense contractors exhibited strong profitability. This includes Boeing (returning to profitability), Lockheed Martin (155% growth in Q4), Textron (66.7%), and GE Aerospace (34.9%). Industry data indicates that the U.S. production index for Aerospace and Other Transportation Equipment began a rapid ascent starting in September 2025, with the average year-on-year growth rate over the subsequent four months reaching 20.9%.
Risk Warning: Potential decline in U.S. stock earnings; diminishing support for profits from AI.
Report Body I. Overall Situation: Profit Growth Shows a Decline As of February 1st, 180 constituents of the S&P 500 had disclosed their Q4 reports (Note: U.S. companies have non-uniform fiscal years; this is marked by calendar time, referring to earnings reports primarily corresponding to Q4 2025). These 180 stocks represent approximately half of the S&P 500's total market capitalization. In terms of quarterly profit growth, the sample of U.S. companies achieved a growth rate of 10.8% in Q4, which is lower than the 24.1% seen in Q3 2025, but still remains at a relatively high level.
II. Sector Breakdown: Significant Divergence (1) Sector Overview: Information Technology, Utilities, and Industrials Show High Profit Growth A sectoral analysis, based on Wind's industry classification, reveals that in Q4 2025, 7 out of 11 sectors experienced negative profit growth. Only four sectors—Information Technology, Financials, Industrials, and Utilities—registered positive profit growth. Among these, the Information Technology sector stood out with a Q4 profit growth rate of 44.5%, contributing 12.6 percentage points to the overall sample's profit growth. This indicates that U.S. stock performance is primarily supported by the Information Technology sector.
(2) Information Technology: Majority of Stocks Show Rapid Earnings Growth Within the Information Technology sector, 25 companies have disclosed Q4 reports. Among them, 21 reported positive profit growth, with 18 achieving growth rates exceeding 10%. Strong performers include SanDisk (672% growth in Q4), Western Digital (210%), Micron Technology (180.2%), Broadcom (97%), and Oracle (94.7%).
(3) Utilities: Possibly Linked to Rising Electricity Prices The Utilities sector demonstrated strong Q4 performance, with the combined profit growth of two sample enterprises reaching 251.1%. U.S. electricity price data shows a consistent year-on-year increase throughout 2025, with the CPI for Electric Utility Services rising 6.7% year-on-year in December.
(4) Industrials: Defense Contractors Show Strong Profitability The Industrials sector reported a profit growth rate of 45.9% for Q4. Notably, defense contractors exhibited strong profitability. This includes Boeing (returning to profitability), Lockheed Martin (155% growth in Q4), Textron (66.7%), and GE Aerospace (34.9%). Industry data indicates that the U.S. production index for Aerospace and Other Transportation Equipment began a rapid ascent starting in September 2025, with the average year-on-year growth rate over the subsequent four months reaching 20.9%.
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