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• The overall earnings picture remains strong and steadily improving. We saw an above-average proportion of companies beat Q2 estimates, with expectations for the current and upcoming periods also increasing.
• For the 472 S&P 500 companies that have already reported Q2 results, total earnings are up +11.2% from the same period last year on +5.7% higher revenues, with 80.3% beating EPS estimates and 78.8% beating revenue estimates.
• The proportion of these 472 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 80.3% compares to the 20-quarter average of 77.8%, while the comparison on the revenues side is 78.8% vs. 70.8%.
• In terms of year-over-year growth, five sectors are expected to enjoy double-digit earnings growth in Q2: Retail (+13.1%), Finance (+14.0%), Aerospace (+26.6%), Tech (+20.7%), and Consumer Discretionary (+135.2%). On the negative side, six sectors are expected to earn less in Q2 relative to the year-earlier period, with double-digit declines at the Energy (-16.8%), Construction (-11.1%), and Autos (-23.3%) sectors. 

A Favorable Estimate Revisions Trend
 

The revisions trend continues to remain favorable, as we have consistently been flagging in recent weeks. We see this in estimates for the current period (2025 Q3) as well as for the last quarter of the year.

For 2025 Q3, the expectation is for earnings growth of +4.8% on +5.5% revenue gains. The chart below shows how Q3 earnings growth expectations have evolved in recent weeks.
 

Image Source: Zacks Investment Research
 

Since the start of Q3 this month, estimates have modestly increased for five of the 16 Zacks sectors, including Finance, Tech, Energy, Retail, and others.

On the negative side, Q3 estimates remain under pressure for the remaining 11 Zacks sectors, with significant declines to estimates for the Medical, Basic Materials, Construction, Transportation, and other sectors.

For the Tech sector, Q3 earnings are expected to be up +10.8% from the same period last year on +11.7% higher revenues. The chart below shows how the sector’s Q3 earnings growth expectations have evolved over the last couple of months.
 

Image Source: Zacks Investment Research
 

You can look at Q3 estimates for Tech players like Meta Platforms (META - Free Report), Alphabet (GOOGL - Free Report), and others.

Meta, which reported Q2 results on July 30^th, is currently expected to bring in $6.69 per share in earnings in Q3. Estimates for Meta have been on a steady upward trend, with the current $6.69 EPS estimate increasing by 14.4% over the past month and 17.4% over the past two months. Alphabet, which reported Q2 results on July 23^rd, is expected to earn $2.32 per share in Q3, with the estimate up +5.9% over the past month and +7.4% over the past two months.

This positive revisions trend is even more notable for the big banks and brokers like JPMorgan, Citigroup, Goldman Sachs, and others in the Finance sector.

The Earnings Big Picture
 

Combining the estimates for the still-to-come S&P 500 member results with actuals from the 472 companies, total Q2 earnings are on track to increase by +12.1% from the same period last year on +6.0% higher revenues.

The chart below shows expectations for 2025 Q2 in terms of what was achieved in the preceding four periods and what is currently expected for the next three quarters.
 

Image Source: Zacks Investment Research

The chart below shows the overall earnings picture for the S&P 500 index on an annual basis.
 

Image Source: Zacks Investment Research
 

We have been pleasantly surprised by the aforementioned favorable revisions trend, which validates the market’s rebound from the April lows. Given the positive run of Q2 results, it will make sense for this trend to remain in place over the coming weeks as we go through this reporting cycle.

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