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 market strategist Charlie Bilello said.
Here are several stats from FactSet that stood out to us:
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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%).
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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%. If 29.2% 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.
AlphaSpace stat to know: $53.4 billion
Some Big Tech earnings for the second quarter were boosted by investments in other tech companies.
Amazon’s (AMZN) second quarter results included a gain of $53.4 billion in other income, primarily due to investments in model builder and customer Anthropic, per Yahoo Finance AlphaSpace analysis.
The bottom line
The second quarter profit showing is outright impressive, considering higher oil prices and investments being made in AI. Wall Street strategists would call this corporate resiliency, and they would be right to paint the quarter with that brush.
Brian Sozzi is Yahoo Finance’s Executive Editor, host of the ‘Power Players With Brian Sozzi’ podcast and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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