Profit growth for U.S. companies probably accelerated for athird straight quarter as strengthening consumer demand drove salesfor General Motors Co. to Apple Inc. and underpinned amanufacturing recovery.

Fourth-quarter earnings per share for companies in the Standard& Poor's 500 Index rose 4.9 percent from a year earlier,according to analysts' estimates compiled by Bloomberg, outpacinggains of 4.8 percent in the third quarter and 3.8 percent in thesecond. Estimates have trailed actual growth by at least 1.8percentage points in the past three quarters.

The profit growth was aided by a jump in consumer confidence tothe highest year-end reading in six years and by industrialproduction that surpassed its 2007 peak for the first time inNovember. While results are still uneven, with online retailerssuch as Amazon.com Inc. outperforming brick-and-mortar chainsincluding Pier 1 Imports Inc., consumers are being bolstered by afive-year low in the unemployment rate and last year's 30 percentsurge in the S&P 500.

“The consumer is actually starting to step up,” said MitchellStapley, chief investment officer for Cincinnati-based ClearArcCapital, which oversees about $7 billion. “We have some decentmomentum out there.”

General Motors Co. will report that adjusted earnings per sharealmost doubled to 89 cents from a year earlier, according toestimates compiled by Bloomberg. GM boosted prices and introduced18 new or refreshed models last year as the automaker recoveredenough from a 2009 bankruptcy to allow the U.S. Treasury to sellits final shares in the company in December. GM revenue may haverisen 4.7 percent in the quarter.

U.S. auto sales rose only 0.3 percent in December as harshweather kept away buyers from showroom floors. For 2013, salesincreased 7.6 percent to 15.6 million vehicles, according toresearcher Autodata Corp., the highest level since 2007.

Apple is projected to report its first gain on earnings pershare in four quarters after consumers snapped up new iPads andiPhones for the holidays. Apple's earnings per share for thequarter ended Dec. 31 have risen 1.6 percent to $14.03, accordingto the average estimate compiled by Bloomberg.

Amazon, which struggled to keep up with a crush of year-endorders, will report adjusted EPS of $1.15 for the quarter, up from21 cents a year earlier, according to analysts' estimates.

More Growth
Earnings growth for S&P500 companies may continue to accelerate in 2014 as the U.S.economy improves and last year's concerns about political squabblesthat shut down the government in October dissipate, said PhilOrlando, chief equity market strategist at Federated Investors,which manages about $380 billion of assets. The U.S. economy mayexpand 2.6 percent in 2014, up from 1.7 percent last year,according to the median of economists' estimates compiled byBloomberg.

That earnings growth could underpin another 15 percent gain inthe S&P 500 Index after stocks rose 30 percent last year, thebest performance since 1997, Orlando said.

Estimates show fourth-quarter profit growth was led byindustrial and consumer-durables stocks, along with the auto andauto-parts makers. Earnings from industrial companies such asGeneral Electric Co. and 3M Co. are forecast to expand 13 percentas a group, while automakers may post a 30 percent gain, accordingto estimates compiled by Bloomberg.

Western Europe began growing again in the fourth quarter afterthe euro area's economy declined year-over-year since the end of2011, helping boost U.S. exports and industry, said Dean Maki,chief U.S. economist at Barclays Plc in New York. The Europeaneconomy expanded 0.4 percent in the fourth quarter from a yearearlier, according to estimates compiled by Bloomberg.

“Europe turning out of recession has had a significant effect onthe U.S. manufacturing sector already,” Maki said in a telephoneinterview.

GE, the world's largest manufacturer of jet engines and diesellocomotives, may post a 20 percent increase in adjusted earningsper share to 53 cents as Chief Executive Officer Jeffrey Immeltexpands the company's industrial businesses and shrinks the lendingunit, based on the average estimate.

Not all companies will post higher profit. JPMorgan Chase &Co., which kicked off the earnings season yesterday as the firstcompany in the Dow Jones Industrial Average to report results,posted a 7.3 percent decline in net income to $5.28 billion on $2.6billion of settlements tied to Bernard Madoff's Ponzi scheme.Litigation costs sapped $1.1 billion from fourth-quarter profit,the firm said.

Earnings at the banks in the S&P 500 Index may rise 1.9percent in the quarter, according to estimates compiled byBloomberg.

Earnings Shortfalls
High profit expectations for the quarter, coupled with last year'soutsized stock gains, may set up some companies for earningsdisappointments that could send shares tumbling, said MattMcCormick, a money manager with Cincinnati-based Bahl & GaynorInc., which oversees about $10.5 billion.

McCormick pointed to shares of Facebook Inc., which doubled lastyear, and Twitter Inc., whose shares shot as high as $73.31 on Dec.26 from its $26 debut in November.

“Expectations are sky-high,” McCormick said. “There are going tobe more misses than people expect, and I think the stocks that missare going to pay a pretty steep penalty.”

Facebook is projected to report adjusted earnings per share of27 cents, up from 17 cents a year earlier. Twitter may report anadjusted loss of $15.5 million, or 2 cents a share, according toanalysts' estimates.

Some retailers, especially those targeting middle-classconsumers, may report declining results. After heavy discountingfailed to lure more shoppers during the holiday season, retailersincluding L Brands Inc. and Pier 1 Imports reduced profit forecastslast week.

L Brands, which owns the Victoria's Secret and Bath & BodyWorks chains, may post adjusted earnings per share of $1.63, downfrom $1.76 a year earlier, according to analysts' estimates. Pier 1Imports' adjusted profit will drop 11 percent to $55 million,according to estimates.

“While bricks and mortar was probably soft, I think online isgoing to offset that,” Orlando said of retailers. Some stores maybenefit this month and in February as consumers use gift cardsreceived during the holidays, he said. December retail sales rose0.2 percent after a 0.4 percent increase in November, according toa Commerce Department report yesterday.

Airline Profits
Flush travelers helpeddrive airline profits, with the six largest carriers forecast topost record combined net income of $1.2 billion for the quarter,nearly a 10-fold increase from $121 million a year ago, MichaelLinenberg, a Deutsche Bank AG analyst in New York, said in a Jan. 9note. More passengers and higher average fares helped drive a 6percent revenue increase for the carriers to $35.1 billion.

Delta Air Lines Inc., the largest U.S. airline by market value,is set to post adjusted earnings per share of 63 cents, accordingto analysts' estimates, up from 28 cents a year earlier.

Rising employment and consumer confidence in the U.S. probablyboosted medical procedures in the fourth quarter, helpingorthopedics makers like Stryker Corp. and hospital chains such asLifePoint Hospitals Inc. Estimates show Stryker may report netincome rose 70 percent to $458 million and LifePoint's adjustedearnings per share may rise to 81 cents from 76 cents a yearearlier.

The largest U.S. phone companies probably squeezed profit growthexceeding 10 percent out of their customers, even as sales showedmoderate increases.

Higher charges for wireless data, which customers use to watchvideos, listen to music and surf the Web, drove earnings at VerizonCommunications Inc. to rise an estimated 63 percent last quarter to62 cents a share, excluding one-time items. Revenue rose 3.3percent to $31.05 billion, according to estimates.

At AT&T Inc., adjusted profit climbed to 51 cents a sharefrom 44 cents, according to analysts' estimates. Sales may rise 1.6percent to $33.1 billion.

Amid the optimism, investors are still wary of how the FederalReserve's tapering of its economic stimulus program will affectinterest rates and profits and how China's focus on building adomestic economy may drag on growth, said Stapley of ClearArcCapital.

“We're uncomfortably optimistic,” he said. “You're finallystarting to see some real milestones we had to have to form afoundation under the recovery.”

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