Tags: apple | earnings | Economic Outlook | stocks

Earnings growth slowed much more dramatically than statistics indicated in the fourth quarter, because record profits at Apple Inc. lifted the average of the S&P 500 Index stocks.
 

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Apple’s $13.1 billion profit by itself reversed a 4.2% drop in S&P 500 earnings during the fourth quarter, transforming it into a 4.4% gain instead, according to Jonathan Golub, chief U.S. market strategist at UBS AG.

If you exclude Apple’s results, the degree to which S&P 500 earnings beat the average analyst estimate drops by two-thirds, Golub told Bloomberg TV.

While it’s clear that fourth-quarter earnings failed to maintain the double-digit growth seen in the previous eight quarters, advisors need to be aware that the earnings and corporate income trends are even weaker than reported.

Excluding Apple, the S&P 500 Index stocks’ fourth-quarter income growth rate was just 1.6%, Golub said.