The after-the-bell report from Alcoa on Tuesday of this week kicks off the start of the second quarter earnings reporting season. But much like the iconic and oft-quoted television comedy Seinfeld, which celebrated its 25th anniversary this past Saturday, it is likely to be “a show about nothing.”
Unfortunately, the earnings season in the United States is likely to be another without much excitement going on. For the S&P 500 companies, second quarter earnings are expected to grow 6.1% from a year ago. This is not nothing — but it is nothing to get too excited about. The growth rate supports our outlook for high single-digit earnings growth in 2014 and further gains for U.S. stocks. But, despite the big show that is likely to be made over the U.S. earnings season in the coming weeks, it is not likely to be all that different from last quarter (despite better economic growth).
In fact, this quarter is not expected to differ from the average quarter of the past 25 years. Since the second quarter of 1989, S&P 500 earnings per share growth has risen an annualized 6.1% — the exact same pace of growth anticipated this quarter.