At this early stage, the first quarter earnings season for the S&P 500 is off to a weaker start than average compared to expectations. Both the percentage of S&P 500 companies reporting positive earnings surprises and the magnitude of earnings surprises are below recent averages. As a result, the index is reporting higher earnings for the first quarter today relative to the end of last week, but flat earnings relative to the end of the quarter. However, the index is reporting year-over-year earnings growth for the seventh consecutive quarter.
Overall, 12% of the companies in the S&P 500 have reported actual results for Q1 2025 to date. Of these companies, 71% have reported actual EPS above estimates, which is below the 5-year average of 77% and below the 10-year average of 75%. In aggregate, companies are reporting earnings that are 6.1% above estimates, which is below the 5-year average of 8.8% and below the 10-year average of 6.9%. Historical averages reflect actual results from all 500 companies, not the actual results from the percentage of companies that have reported through this point in time.
During the past week, positive EPS surprises reported by companies in the Financials sector, partially offset by downward revisions to EPS estimates for a company in the Information Technology sector, were the largest contributors to the slight increase in the overall earnings growth rate for the index over this period. Since March 31, positive EPS surprises reported by companies in the Financials sector have been offset by downward revisions to EPS estimates for companies in multiple sectors, resulting in no change to the overall earnings growth rate for the index over this period.
As a result, the index is reporting higher earnings for the first quarter today relative to the end of last week, but flat earnings relative to the end of the quarter. The blended (combines actual results for companies that have reported and estimated results for companies that have yet to report) earnings growth rate for the first quarter is 7.2% today, compared to an earnings growth rate of 7.1% last week and an earnings growth rate of 7.2% at the end of the first quarter (March 31).
If 7.2% is the actual growth rate for the quarter, it will mark the seventh consecutive quarter of year-over-year earnings growth for the index.
Seven of the eleven sectors are reporting (or are projected to report) year-over-year growth, led by the Health Care, Information Technology, and Utilities sectors. On the other hand, four sectors are reporting (or are predicted to report) a year-over-year decline in earnings, led by the Energy, Materials, and Consumer Staples sectors.
In terms of revenues, 61% of S&P 500 companies have reported actual revenues above estimates, which is below the 5-year average of 69% and below the 10-year average of 64%. In aggregate, companies are reporting revenues that are 0.5% above the estimates, which is below the 5-year average of 2.1% and below the 10-year average of 1.4%. Again, historical averages reflect actual results from all 500 companies, not the actual results from the percentage of companies that have reported through this point in time.
During the past week, positive and negative revenue surprises reported by companies in multiple sectors offset each other, resulting in no change to the overall revenue growth rate for the index during this period. Since March 31, downward revisions to revenue estimates and negative revenue surprises have offset upward revisions to revenue estimates and positive revenue surprises, resulting in a slight decrease to the overall revenue growth rate for the index during this period.
As a result, the blended revenue growth rate for the first quarter is 4.3% today, compared to a revenue growth rate of 4.3% last week and a revenue growth rate of 4.4% at the end of the first quarter (March 31).
If 4.3% is the actual revenue growth rate for the quarter, it will mark the 18th consecutive quarter of revenue growth for the index.
Ten sectors are reporting (or are projected to report) year-over-year growth in revenues, led by the Information Technology and Health Care sectors. On the other hand, the Industrials sector is the only sector reporting a year-over-year decline in revenues.
For Q2 2025 through Q4 2025, analysts are calling for earnings growth rates of 7.2%, 9.7%, and 9.3%, respectively. For CY 2025, analysts are predicting (year-over-year) earnings growth of 10.0%.
The forward 12-month P/E ratio is 19.0, which is below the 5-year average (19.9) but above the 10-year average (18.3). This P/E ratio is also below the forward P/E ratio of 20.2 recorded at the end of the first quarter (March 31).
During the upcoming week, 122 S&P 500 companies (including 7 Dow 30 components) are scheduled to report results for the first quarter.
The FactSet Earnings Insight report is being published one day early this week.
Q1 2025: Scorecard
Q1 2025: Growth
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