Earnings season is nearly complete — and the results so far have painted a surprisingly broad picture of strength across multiple sectors.
The Q1 earnings cycle results have been broadly strong across all sectors, and management commentary and guidance have generally remained stable despite ongoing geopolitical uncertainty. Analysts’ current Q2 expectations remain positive, with estimates trending higher in several sectors.
Through Thursday, May 14th, we have seen Q1 results from 454 S&P 500 members or 90.8% of the index’s total membership. Total earnings for these companies are up +21.3% from the same period last year on +10.4% higher revenues, with 79.5% beating EPS estimates and 78.4% beating revenue estimates.
Much of the earnings attention lately has focused on the mega-cap technology companies within the Magnificent 7 group. Many companies have reported results above consensus EPS and revenue estimates.
The Mag 7 group is expected to deliver +26.2% earnings growth on +18.6% revenue growth in 2026, following +24.8% earnings growth in 2025. The Mag 7 group is on track to account for 27% of all index earnings in 2026.
Earnings growth for the quarter would be +10.1% excluding the Tech sector’s substantial contribution, and +16.7% without the Magnificent 7.
Management guidance and commentary have generally remained stable despite the uncertain geopolitical backdrop. This has helped keep aggregate earnings revision trends relatively stable, if not positive.
The improvement in the earnings outlook has been driven mostly by the Tech sector over the past year, with positive Tech sector estimate revisions offsetting negative revisions elsewhere, keeping the aggregate revisions trend in the neutral-to-positive direction.
Estimates have moved higher for 7 sectors since the quarter got underway. These sectors are: Tech, Energy, Basic Materials, Utilities, Industrials, Retail, and Business Services.
The positive revision trend in the Energy and Basic Materials sectors is primarily driven by the conflict in the Persian Gulf and its impact on oil, LNG, and other commodity supply.
On the negative side, Q2 estimates have declined for 9 sectors. The sectors suffering the most declines include Transportation, Autos, Consumer Discretionary, Construction, Finance, and Consumer Staples.
Broader Earnings Trends
1Q2026 earnings are on track to be up +23.9% from the same period last year on +10.9% higher revenues, with 13 sectors expected to enjoy positive earnings growth. Importantly, 2026 Q1 aggregate earnings are on track to be a new all-time quarterly record, as the chart below shows.
For calendar year 2026, total S&P 500 earnings are expected to grow by 19.7%, compared with 13.1% last year and 16% expected next year.
All 16 sectors are currently expected to enjoy positive earnings growth in 2026, a development that we haven’t seen in a very long time. The Tech and Energy sectors are major contributors to earnings growth in 2026, with growth rates of +33.2% and +56.7%, respectively.
Have any earnings trends this quarter surprised you?
The chart below shows current 2026 Q1 earnings and revenue growth expectations, in the context of growth over the preceding four quarters and expectations for the coming three quarters.
This article is for general informational and educational purposes only. It is not intended as financial advice, investment guidance, or a recommendation to buy or sell any security. The content reflects publicly available information and broad market commentary. Readers should conduct their own research and consult a licensed financial professional before making investment decisions.
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