Corporate profits have been stuck in reverse for the last year and a half. They finally look like they're getting back in gear.
S&P 500 companies in aggregate haven't seen year-over-year earnings gains since the first quarter of 2015, and judging by the looks of things on the surface, that profit recession could continue. However, if historical trends hold true in this quarter, corporate America likely will turn a profit.
Earnings season revs up this week, with Alcoa reporting Tuesday morning — what once was the season's unofficial kickoff — and with several large banks on tap Friday.
Current projections are that earnings for the S&P 500 in aggregate will decline 2.1 percent, according to FactSet. That almost never holds true, though. Companies set the bar low heading into the reporting period, and usually about 68 percent end up beating analyst projections. So far in the third-quarter season, 20 of the 25 companies that have reported beat the Street.
If the historical trend holds up, that would take the actual earnings growth to 0.9 percent, according to FactSet calculations. That would mark the first growth quarter since the first quarter of 2015, when earnings went up 0.5 percent. The second quarter of 2016 saw a decline of 3.5 percent.