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Analysts Made Larger Cuts Than Average to EPS Estimates for S&P 500 Companies for Q2

Earnings

By John Butters  |  July 3, 2025

Given concerns in the market about inflation and tariffs, did analysts lower EPS estimates more than normal for S&P 500 companies for the second quarter?

The answer is yes. During the quarter, analysts lowered EPS estimates by a larger margin compared to the three most recent averages. The Q2 bottom-up EPS estimate (which is an aggregation of the median EPS estimates for Q2 for all the companies in the index) decreased by 4.2% (to $62.83 from $65.55) from March 31 to June 30.

In a typical quarter, analysts usually reduce earnings estimates during the quarter. During the past 5 years (20 quarters), the average decline in the bottom-up EPS estimate during the quarter has been 3.0%. During the past 10 years, (40 quarters), the average decline in the bottom-up EPS estimate during quarter has been 3.1%. During the past 15 years, (60 quarters), the average decline in the bottom-up EPS estimate during the quarter has been 3.2%. During the past 20 years (80 quarters), the average decline in the bottom-up EPS estimate during the quarter has been 4.2%.

Thus, the decline in the bottom-up EPS estimate recorded during the second quarter was larger than the 5-year average, the 10-year average, and the 15-year average. However, it should be noted that the decrease was equal to the 20-year average.

At the sector level, ten of the eleven sectors witnessed a decrease in their bottom-up EPS estimate for Q2 2025 from March 31 to June 30, led by the Energy (-18.9%) sector.

Analysts have also continued to lower EPS estimates for CY 2025. From December 31 through June 30, the CY 2025 bottom-up EPS estimate declined by 3.6% (to $264.16 from $274.12).

Analysts also usually reduce earnings estimates for the year during the first six months of the year. During the past 5 years, the average decline in the annual bottom-up EPS estimate during the first six months of the year has been 3.3%. During the past 10 years, the average decline in the annual bottom-up EPS estimate during the first six months of the year has been 2.4%. During the past 15 years, the average decline in the annual bottom-up EPS estimate during the first six months of the year has been 1.5%. During the past 20 years, the average decline in the annual bottom-up EPS estimate during the first six months of the year has been 2.8%. During the past 25 years, the average decline in the annual bottom-up EPS estimate during the first six months of the year has been 2.8%.

Thus, the decline in the CY 2025 bottom-up EPS estimate recorded during the first six months of 2025 was larger than the 5-year average, the 10-year average, the 15-year average, 20-year average, and 25-year average for the first six months of the year.

At the sector level, ten sectors witnessed a decrease in their bottom-up EPS estimate for CY 2025 from December 31 to June 30, led by the Energy (-17.8%) and Materials (-12.0%) sectors. On the other hand, the Communication Services (+2.6%) sector is the only sector that recorded an increase in its bottom-up EPS estimate for CY 2025 during this period. 

The FactSet Earnings Insight report is being published one day early this week on July 3. The next edition of the report will be published on July 11.

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This blog post is for informational purposes only. The information contained in this blog post is not legal, tax, or investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.

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John Butters

Vice President, Senior Earnings Analyst

Mr. John Butters is Vice President and Senior Earnings Analyst at FactSet. His weekly research report, “Earnings Insight,” provides analysis and commentary on trends in corporate earnings data for the S&P 500 including revisions to estimates, year-over-year growth, performance relative to expectations, and valuations. He is a widely used source for the media and has appeared on CNBC, Fox Business News, and the Business News Network. In addition, he has been cited by numerous print and online publications such as The Wall Street Journal, The Financial Times, The New York Times, MarketWatch, and Yahoo! Finance. Mr. Butters has over 15 years of experience in the financial services industry. Prior to FactSet in January 2011, he worked for more than 10 years at Thomson Reuters (Thomson Financial), most recently as Director of U.S. Earnings Research (2007-2010).

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The information contained in this article is not investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.