By Caroline Valetkevitch

New York (Reuters) – Analysts are more cautious about the profits of American companies for the first quarter of this year, while the customs duties announced by President Donald Trump are likely to trigger a world trade war that could affect economic growth.

Apple, Tesla and Ford are among the biggest contributors to the recent revision of the decline in the quarter estimates from January to the end of March, as well as certain insurers, whose forecasts were affected by forest fires in California earlier in the year, said Tajinder Dhillon, analyst at LSEG.

The profit forecasts for companies in the S&P 500 index in the first quarter have fell 4.5 percentage points since January 1, which represents the largest downward revision since the fourth quarter of 2023.

The growth in the profits of S&P 500 companies for the first quarter is now estimated at 7.7% in annual sliding, which would be the lowest level since the third quarter of 2023 and a sharp decline compared to the increase of 17.1% of the fourth quarter of last year, according to LSEG data published on Friday.

If a handful of companies has already published quarterly figures, there are still several weeks before the official start of the results season.

“We know that there is a negative bias. We just don’t know to what extent,” observes Michael O’Rourke, strategist at Jonestrading in Stamford, in Connecticut.

Profit estimates tend to lower in the weeks preceding the start of the season of results, companies adopting a more cautious approach, but most of them end up exceeding these reduced expectations.

The fears have, however, increased in recent weeks concerning the impact on the world’s leading economy of American customs duties and reprisals from the trade partners of the United States, as well as budget cuts from the Trump administration.

Proof of this nervousness, the S&P 500 index entered on March 13 in a correction phase, closing more than 10% below its peak of February 19.

“Many people are worried about things like customs duties (…) In reality, it is a general economic slowdown that would be very difficult to manage for businesses,” said Sameer Samana, the main strategist of the global markets at the Wells Fargo investment institute.

Some investors hope, however, that the profits of the first quarter could serve as a catalyst for market purchases after the sales movement in recent weeks.

The S&P 500 is always negotiated at a multiple of 21 times the expected profits, while the average course/medium benefit ratio is around 18, show the LSEG data.

Apple and Tesla under the lights of the ramp

Apple published in late January, these latest quarterly results, which exceeded analysts’ expectations, but iPhone sales and turnover in China were low due to the competition and the slowness of the deployment of artificial intelligence functions.

On Thursday, The Information site reported, citing sources that Apple lost more than a billion dollars a year on its Apple TV+streaming service.

Another company on which all looks will undoubtedly be Braquera will be Tesla, whose sales fell in February in several European countries, including in France, compared to the previous year, the company being faced with a loyalty to the brand when its general manager Elon Musk is a close ally of Donald Trump.

But even after a fall of almost 40% of the Tesla action since the start of the year, the title has been negotiated more than 80 times the profits.

As for Ford, he warned in February that he would accuse up to $ 5.5 billion in losses this year on his activities of electric vehicles and software.

Car manufacturers are subject to special attention, the White House having declared at the beginning of the month that they would be exempt for a month of customs duties of 25% on imports of Canada and Mexico.

In the insurance sector, some analysts consider January fires in California as one of the most expensive natural disasters. The Travelers Companies insurer warned in February that it expected a before tax loss of $ 1.7 billion.

On the side of airlines, it is above all the uncertainty about the consumption expenses that concern. Delta Air Lines and other groups have already lowered their profits, believing that customers could postpone their travel projects.

(Caroline Valetkevitch report; Diana Mandia, edited by Blandine Hénault)

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