Now that 70% of the S&P 500 has released quarterly results for current earnings season, it’s time to get ahead of the curve and identify the firms that have improved two key profit margins and boosted sales per share the most.
Some day traders will react to news reports when corporations release their financial results during earnings season, whether they beat or miss consensus projections for sales, earnings per share, or an industry-specific statistic like the number of active users for a streaming service. If those figures are greater or lower than analysts anticipated, there may even be a response to the company’s guidance, or its own projections for upcoming quarters.
Instead, investors can prefer to examine the real performance of the companies and contrast it with the outcomes of prior quarters. This could reveal whether the businesses have successfully retained their pricing power for goods and services.
Season screen for earnings
Since 20% of the S&P 500 SPX have fiscal reporting periods that don’t coincide with the calendar, quarterly earnings seasons don’t really finish. As of Tuesday, results for fiscal quarters ending on or after November 15th have been released by 351 companies, or 70% of the S&P 500.
Because one-time events (such goodwill write-downs or other special charges) can skew the bottom line, earnings per share are not included in the screen.
The 351 companies were vetted as follows:
— higher quarterly revenue per share compared to the previous quarter of the year. Since the per-share figures account for any dilution to a business’s equity if it has issued shares to raise money or to help finance the acquisition of another company, we looked at sales per share rather than raw revenue. An increase in the number of shares shows how much of the gain is “available” to investors who owned the acquiring company’s stock prior to the issuance of the new shares, even though sales will grow if a company buys out a rival. However, if a corporation reduces its share count by repurchasing stock, sales per share will rise faster than revenue. Any stock splits are taken into account when calculating per-share figures.
The gross profit margins have improved. The gross margin of a business is calculated by dividing its net sales by the cost of goods or services sold. Sales less returns and discounts (like coupons) equals net sales. The actual costs incurred in producing the goods or rendering the services are included in the cost of goods or services supplied. Pricing power and core efficiency are gauged by gross margin.
Enhanced operating profit margins. More overhead and other costs not directly associated with the production of goods and services are included in a company’s operating margin. It can be summed up as sales divided by earnings before interest and taxes.
Profit margins differ depending on the sector. Therefore, comparisons across businesses with comparable business models might be most helpful.
For every business, a combination of increasing sales and growing operating and gross margins is encouraging.
FactSet provided operating and gross margin data for 278 of the 351 businesses that were screened. Since banks and insurers have their own industry-based profitability metrics, many financial sector enterprises do not have access to these numbers.
FactSet is unable to determine the margins for certain corporations until the Securities and Exchange Commission receives more thorough 10-Q or 10-K reports. These are occasionally unavailable for a few weeks following the filing of a company’s earnings news release.
Out of the 278 firms in the S&P 500 that we reviewed, these 20 companies demonstrated the biggest gains in quarterly revenue per share, together with improved gross and operating margins compared to the previous year. To view the columns on the right, you may need to scroll the table.
Company Ticker Increase in sales per share Gross margin Gross margin for year-earlier quarter Operating margin Operating margin for year-earlier quarter
Micron Technology Inc. MU 80.7% 38.44% -0.74% 48.25% 16.34%
Seagate Technology Holdings PLC STX 44.0% 34.92% 23.60% 23.74% 10.29%
General Motors Co. GM 37.5% 10.17% 7.70% 23.24% 9.11%
Western Digital Corp. WDC 28.7% 35.38% 16.23% 20.91% -0.23%
Enphase Energy Inc. ENPH 27.5% 50.92% 47.04% 22.18% 8.40%
Amphenol Corp. Class A APH 27.4% 34.29% 33.07% 25.70% 24.68%
Fox Corp. Class A FOXA 25.1% 23.73% 17.57% 15.30% 8.17%
Advanced Micro Devices Inc. AMD 23.7% 46.36% 40.40% 24.54% 19.80%
Intuitive Surgical Inc. ISRG 23.2% 68.04% 66.24% 35.62% 29.26%
Meta Platforms Inc. META 22.1% 84.74% 81.05% 71.89% 51.62%
NVR Inc. NVR 21.7% 23.39% 22.91% 17.06% 15.62%
Lam Research Corp. LRCX 19.2% 47.37% 47.16% 32.68% 30.99%
Aptiv PLC APTV 19.1% 22.87% 16.91% 20.46% 14.17%
Generac Holdings Inc. GNRC 18.1% 38.66% 34.17% 19.59% 18.18%
Expedia Group Inc. EXPE 17.4% 82.82% 81.02% 17.27% 14.76%
Netflix Inc. NFLX 17.1% 43.41% 39.91% 63.37% 60.42%
Fair Isaac Corp. FICO 17.0% 80.15% 78.08% 41.61% 40.36%
Fortinet Inc. FTNT 16.9% 81.75% 77.30% 54.32% 29.28%
S&P Global Inc. SPGI 16.5% 60.63% 58.06% 46.91% 40.29%
Lennox International Inc. LII 16.5% 33.85% 30.72% 20.36% 17.40%
Source: FactSet
Since computer storage memory sales have historically been cyclical, Micron’s (MU) 81% gain in quarterly sales per share shows that it has recovered from a period of decline. With its new high bandwidth memory solutions for data centers, Micron was “well positioned to capitalize on the immense opportunities artificial intelligence is fueling across end markets,” according to Sanjay Mehrotra, the company’s CEO, in late 2023. In a press statement announcing the company’s latest results on December 18, Mehrotra stated that “data center revenue surpassed 50% of our total revenue for the first time.” According to him, Micron is still working “to gain share in the highest margin and strategically important parts of the [AI hardware] market.”
General Motors Co. (GM) is ranked third on the list, which may surprise you given that its sales per share increased 37.5% from the previous quarter of the year. Since the business spent $7.1 billion on share repurchases in 2024, its share count has decreased by 28%. The company’s fourth-quarter sales of $47.7 billion, up “only” 11% from the previous year, highlight the significance of a buyback promise. However, even that figure is remarkable for a long-standing automaker.
