You may not have realized this amid the grind of a busy earnings season, but corporate America has delivered a bang-up performance when it comes to profits.
A reality check With second quarter reporting season beginning to slow down, it’s worth examining how companies have performed on the bottom line — especially as the S&P 500 (^GSPC) is hovering near fresh records
The profit numbers are nothing short of stellar. Second quarter earnings for S&P 500 companies are on pace to rise 50% year over year, the highest growth rate since the second quarter of 2021, according to a new note from FactSet. “We’ve never seen earnings growth this high outside of post-recessionary rebounds. This is an unprecedented boom fueled by massive EPS gains in big tech, including markups in SpaceX/Anthropic,” Creative Planning chief strategist Charlie Bilello said.
Here are several stats from FactSet that stood out to us: – 88% of the companies in the S&P 500 have reported second quarter results, with 86% having reported earnings per share (EPS) above estimates. That is above the five-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 the second quarter of 2021 (87%). – In aggregate, companies are reporting earnings 29.2% above estimates, which is also above the five-year average of 7% and above the 10-year average of 7.4%.