S&P 500 Reporting Net Profit Margin Above 12% for the 5th Straight Quarter

Given concerns in the market about tariffs and higher costs, 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 2025 is 12.3%, which is below the previous quarter’s net profit margin (12.7%), but above the year-ago net profit margin (12.2%) and above the 5-year average (11.8%).

In fact, this quarter marks the 5^th consecutive quarter that the S&P 500 is reporting a net profit margin above 12%. The last time the index reported five straight quarters of net profit margins above 12% was Q2 2021 through Q2 2022. However, the index is also reporting its first quarter-over-quarter decline in net profit margin since Q4 2023.

At the sector level, only three sectors are reporting a year-over-year increase in their net profit margins in Q2 2025 compared to Q2 2024: Communication Services (14.2% vs. 11.6%), Information Technology (24.8% vs, 24.0%), and Financials (19.6 vs. 18.8%). On the other hand, eight sectors are reporting a year-over-year decrease in their net profit margins in Q2 2025 compared to Q2 2024, led by the Energy (7.5% vs. 9.0%) and Real Estate (34.3% vs. 35.7%) sectors.

Five sectors are reporting net profit margins in Q2 2025 that are above their 5-year averages, led by the Financials (19.6% vs. 17.2%) sector. On the other hand, six sectors are reporting net profit margins in Q2 2025 that are below their 5-year averages, led by the Energy (7.5% vs. 9.9%) sector.

Five sectors are reporting a quarter-over-quarter increase in their net profit margins in Q2 2025 compared to Q1 2025, led by the Materials (10.5% vs. 9.1%) sector. On the other hand, six sectors are reporting a quarter-over-quarter decrease in their net profit margins in Q2 2025 compared to Q1 2025, led by the Communication Services (14.2% vs. 16.2%) sector.

It is interesting to note that analysts believe net profit margins for the S&P 500 will be improve in the second half of 2025. As of today, the estimated net profit margins for Q3 2025 and Q4 2025 are 12.7% and 12.8%, respectively. 

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