Given concerns in the market about tariffs and higher costs, what is the S&P 500 reporting for a net profit margin for Q3?
The blended net profit margin for the S&P 500 for Q3 2025 is 12.8%, which is equal to the previous quarter’s net profit margin, but above the year-ago net profit margin and above the 5-year average.
In fact, this quarter marks the 6th consecutive quarter that the S&P 500 is reporting a net profit margin above the 5-year average (12.1%).
At the sector level, four sectors are reporting a year-over-year increase in their net profit margins in Q3 2025 compared to Q3 2024, led by the Financials (19.9% vs. 18.0%) and Utilities (16.7% vs. 14.8%) sectors. On the other hand, six sectors are reporting a year-over-year decrease in their net profit margins in Q3 2025 compared to Q3 2024, led by the Communication Services (13.8 vs. 14.8%), Real Estate (34.3% vs. 35.2%), and Health Care (7.3% vs. 8.2%) sectors.
Seven sectors are reporting net profit margins in Q3 2025 that are above their 5-year averages, led by the Utilities (16.7% vs. 13.6%) sector. On the other hand, four sectors are reporting net profit margins in Q3 2025 that are below their 5-year averages, led by the Health Care (7.3% vs. 9.3%) and Energy (8.0% vs. 9.8%) sectors.
Five sectors are reporting a quarter-over-quarter increase in their net profit margins in Q3 2025 compared to Q2 2025, led by the Utilities (16.7% vs. 12.8%) sector. On the other hand, six sectors are reporting a quarter-over-quarter decrease in their net profit margins in Q3 2025 compared to Q2 2025, led by the Communication Services (13.8% vs. 15.3%) sector.
It is interesting to note that analysts believe net profit margins for the S&P 500 will be higher in 2026. As of today, the estimated net profit margins for Q4 2025 through Q2 2026 are 12.8%, 13.4% and 13.7%, respectively.
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