More than halfway through the Q2 earnings season, the S&P 500 is reporting impressive results, even if one excludes the unusually large EPS surprises reported by Alphabet and Amazon.com. Overall, both the percentage of S&P 500 companies reporting positive earnings surprises and the magnitude of earnings surprises are above recent averages. As a result, the index is reporting higher earnings for the second quarter today relative to the end of last week and relative to the end of the quarter. In addition, the index is also reporting its highest (year-over-year) earnings growth rate since Q2 2021.
Overall, 61% of the companies in the S&P 500 have reported actual results for Q2 2026 to date. Of these companies, 86% have reported actual EPS above estimates, which is above the 5-year average of 78% and above the 10-year average of 76%. If 86% is the actual number for the quarter, it will mark the highest percentage of S&P 500 companies reporting a positive EPS surprise since Q2 2021 (87%). In aggregate, companies are reporting earnings that are 31.4% above estimates, which is also above the 5-year average of 7.0% and above the 10-year average of 7.4%. If 31.4% is the actual number for the quarter, it will mark the highest earnings surprise reported by the index since FactSet began tracking this metric in 2008. The current record for the highest earnings surprise is 23.2%, which occurred in Q2 2020. 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.
The unusually high earnings surprise percentage for the index is mainly due to the unusually large positive EPS surprises reported by Alphabet ($9.11 vs. $2.88) and Amazon.com ($5.75 vs. $1.82) for Q2. The (GAAP) EPS actual for Alphabet for Q2 included a gain of $98 billion, while the (GAAP) EPS actual for Amazon.com for Q2 included non-operating, pre-tax other income of $53.4 billion (primarily from investments in Anthropic). Excluding Alphabet and Amazon.com, the earnings surprise percentage for the S&P 500 for Q2 2026 would fall to 9.2% from 31.4%. However, this surprise percentage is still above the 5-year and 10-year averages.
During the past week, the positive EPS surprise reported by Amazon.com was the largest contributor to the increase in the overall earnings growth rate for the index over this period. Since June 30, the positive EPS surprises reported by Alphabet and Amazon.com have been the largest contributors to the increase in the overall earnings growth rate for the index over this period.
As a result, the index is reporting higher earnings for the second quarter today relative to the end of last week and 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 second quarter is 47.4% today, compared to an earnings growth rate of 38.0% last week and an earnings growth rate of 23.2% at the end of the second quarter (June 30).
If 47.4% is the actual growth rate for the quarter, it will mark the highest earnings growth rate reported by the index since Q2 2021 (91.6%). It will also mark the second consecutive quarter of earnings growth above 20% and the seventh consecutive quarter of double-digit earnings growth for the index.
Excluding Alphabet and Amazon.com, the blended earnings growth rate for the S&P 500 for Q2 2026 would fall to 28.8% from 47.4%. However, this would still mark the mark the second consecutive quarter of earnings growth above 20% and the seventh consecutive quarter of double-digit earnings growth for the index.
Ten of the eleven sectors are reporting year-over-year growth. Eight of these ten sectors are reporting double-digit growth, led by the Energy, Communication Services, Consumer Discretionary, Information Technology, and Materials sectors. On the other hand, the Health Care sector is the only sector reporting a year-over-year decline in earnings.
In terms of revenues, 77% of S&P 500 companies have reported actual revenues above estimates, which is above the 5-year average of 70% and above the 10-year average of 68%. In aggregate, companies are reporting revenues that are 2.9% above the estimates, which is also above the 5-year average of 1.9% and above the 10-year average of 1.6%. If 2.9% is the actual number for the quarter, it will mark the highest revenue surprise reported by the index since Q2 2022 (3.2%). 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.
As a result, the blended revenue growth rate for the second quarter is 14.1% today, compared to a revenue growth rate of 13.2% last week and a revenue growth rate of 12.2% at the end of the second quarter (June 30).
During the past week, positive revenue surprises reported by companies in multiple sectors (led by the Energy and Health Care sectors) were the largest contributors to the increase in the overall revenue growth rate for the index over this period. Since June 30, positive revenue surprises reported by companies in the Financials, Health Care, Energy, and Consumer Discretionary sectors have been the largest contributors to the increase in the overall revenue growth rate for the index over this period.
If 14.1% is the actual revenue growth rate for the quarter, it will mark the highest revenue growth rate reported by the index since Q4 2021 (16.1%). It will also mark the second consecutive quarter of double-digit revenue growth for the index.
All eleven sectors are reporting year-over-year growth in revenues. Five of these eleven sectors are reporting double-digit growth, led by the Information Technology, Energy, and Communication Services sectors.
For Q3 2026 and Q4 2026, analysts are calling for earnings growth rates of 27.4% and 25.2%. For CY 2026, analysts are predicting (year-over-year) earnings growth of 29.1%.
The forward 12-month P/E ratio is 19.6, which is below the 5-year average (19.9) but above the 10-year average (19.0). This P/E ratio is also below the forward P/E ratio of 20.4 recorded at the end of the second quarter (June 30).
During the upcoming week, 136 S&P 500 companies (including 5 Dow 30 components) are scheduled to report results for the second quarter.
Q2 2026: Scorecard
Q2 2026: Growth
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.