Positive Q2 Earnings Results Reveal Improving Growth Picture

Q2 earnings results show an improving growth picture with 87.2% of S&P 500 companies beating EPS estimates and 80.3% beating revenue estimates. Total earnings are up 8.3% from last year, with 91.2% of Finance sector companies beating EPS estimates. The revisions trend has stabilized and started turning positive in recent days, with estimates increasing for half of the 16 Zacks sectors. Q3 earnings for the Tech sector are expected to be up 6.8% from last year on 9.7% higher revenues.

A positive picture is emerging from the Q2 earnings season, with an above-average proportion of companies beating consensus estimates. The combination of a stabilizing macroeconomic backdrop and reassuring management commentary has helped reverse the earlier negative revisions trend, with estimates for the second half of the year starting to increase again.

For the 117 S&P 500 companies that have already reported Q2 results, total earnings are up +8.3% from the same period last year on +5.3% higher revenues, with 87.2% beating EPS estimates and 80.3% beating revenue estimates [1]. The proportion of these 117 index members beating EPS and revenue estimates is tracking notably above the historical average for this group of companies. The Q2 EPS beats percentage of 87.2% for this group of index members compares to the 20-quarter average of 81.9% while the same on the revenues side is 80.3% vs. 70% [1].

For the Finance sector, we now have Q2 results from 53.3% of the sector’s market capitalization in the S&P 500 index. Total earnings for these Finance companies are up +17.3% from the same period last year on +5.5% higher revenues, with 91.2% beating EPS estimates and 79.4% beating revenue estimates [1].

An emerging positive estimate revisions trend has been observed in recent days. Since the start of Q3 this month, estimates have modestly increased for half of the 16 Zacks sectors, including Finance, Tech, Energy, Consumer Discretionary, Autos, and others [1]. On the negative side, Q3 estimates are still under pressure for the other 8 Zacks sectors, with significant declines to estimates for the Medical, Basic Materials, Construction, Transportation, and other sectors [1].

For the Tech sector, Q3 earnings are expected to be up +6.8% from the same period last year on +9.7% higher revenues [1]. The chart below shows how the sector’s Q3 earnings growth expectations have evolved over the last couple of months [1].

The positive results from more than 23% of S&P 500 members have helped push the Q2 earnings growth expectation higher, with earnings for the S&P 500 index now expected to increase by +6.9% from the same period last year on +4.5% higher revenues [1].

References:
[1] https://www.nasdaq.com/articles/q2-earnings-results-show-improving-growth-picture
[2] https://oilprice.com/Company-News/NextEra-Energy-Sees-Strong-Q2-2025-Earnings-Growth.html
[3] https://finviz.com/news/113210/q2-earnings-results-show-an-improving-growth-picture