Arabic version: هوامش أرباح S&P 500 تسجل وتيرة قياسية
According to Cnbc, S&P 500 companies are retaining more profit from each dollar of sales, offering a tailwind for stocks. FactSet data shows the index’s blended net profit margin running at 16.9% for the second quarter, a level that would be the highest since FactSet began tracking the measure in 2009.
The second-quarter figure is up from 14.8% in the first quarter and 12.9% a year earlier. It also stands above the five-year average of 12.4%. Net profit margin measures the share of revenue that companies retain after paying all expenses.
Alphabet and Amazon are the largest contributors to the index’s record-high margin. Alphabet reported a 34% operating margin in the second quarter, compared with 32% a year earlier, and recorded a $98 billion gain in other income, primarily from unrealized gains on equity securities. Amazon posted $53.4 billion in net other income, largely tied to its investment in Anthropic, while its operating margin rose to 13.7% from 11.4% a year earlier.
The margin strength extends beyond the two companies. Excluding Alphabet and Amazon, the S&P 500 margin is 15%, also a record and the highest reported for the index since 2009. Eight of the index’s 11 sectors are reporting higher margins than a year ago, led by technology, communication services, consumer discretionary and energy. Vanguard senior economist Adam Schickling said strong demand and operating leverage have helped firms turn more revenue into profit, while warning that competitive pressure from new entrants could pose a future risk for technology-sector margins.
