S&P 500 Reporting Highest Net Profit Margin in More Than 15 Years

Given concerns in the market about volatility in oil prices, what is the S&P 500 reporting for a net profit margin for Q2?

The blended net profit margin for the S&P 500 for Q2 2026 is 15.7%. If 15.7% is the actual net profit margin for the quarter, it will mark the highest net profit margin reported by the index since FactSet began tracking this metric in 2009. The current record (going back to 2009) is 14.8%, which occurred in the previous quarter.

At the company level, Alphabet is the largest contributor to the record-high net profit margin for the S&P 500 due to the unusually large EPS surprise reported by the company for Q2 2026 (for more details, please see Alphabet Drives S&P 500 Earnings Growth to Highest Level Since 2021 On Valuation Gains). If Alphabet were excluded, the blended net profit margin for the index would fall to 14.4% from 15.7%.

At the sector level, seven sectors are reporting a year-over-year increase in their net profit margins in Q2 2026 compared to Q2 2025, led by the Communication Services (28.0% vs. 15.2%) sector. On the other hand, three sectors are reporting a year-over-year decrease in their net profit margins in Q2 2026 compared to Q2 2025, led by Health Care (6.3% vs. 8.1%) sector.

Eight sectors are reporting net profit margins in Q2 2026 that are above their 5-year averages, again led by the Communication Services (28.0% vs. 13.0%) sector. On the other hand, three sectors are reporting net profit margins in Q2 2026 that are below their 5-year averages, led by the Health Care (6.3% vs. 8.9%) sector.

Eight sectors are also reporting a quarter-over-quarter increase in their net profit margins in Q2 2026 compared to Q1 2026, led by the Communication Services (28.0% vs. 20.7%) sector. On the other hand, three sectors are reporting a quarter-over-quarter decrease in their net profit margins in Q2 2026 compared to Q1 2026, led by the Industrials (10.7% vs. 12.3%) and Utilities (13.3% vs. 14.8%) and sectors.

It is interesting to note that analysts believe net profit margins for the S&P 500 will be about 15% for the rest of 2026. As of today, the estimated net profit margins for Q3 2026 and Q4 2026 are 14.9% and 15.0%, respectively.

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