Q3 earnings outlook builds on a strong second quarter

The Q2 2026 earnings season is not yet technically over, with a handful of S&P 500 companies yet to report, but the results have been largely outstanding to date:

86% of S&P 500 companies have reported actual EPS above estimated EPS, the highest percentage since Q2 2021, according to FactSet.
Q2 earnings growth for S&P 500 companies is estimated at 52.0%, also the highest since Q2 2021.
The Energy sector is leading all sectors in earnings growth for Q2, estimated at 146%.
Artificial intelligence (AI) was frequently mentioned in corporate earnings calls, with 321 S&P 500 companies mentioning AI through Aug. 28.

Zacks Investment Research offered the following broad earnings commentary:

“Although corporate earnings have trended positively over the past two years, the current momentum is truly exceptional. Growth is not only rapid and accelerating but also widely distributed across sectors and steadily expanding. This broad-based strength creates a highly supportive backdrop for the market. …

“For 2026 Q3, the expectation is that total S&P 500 earnings will increase +23.0% from the same period last year on +11.1% higher revenues, with 14 of the 16 Zacks [sectors] expected to enjoy positive earnings growth and 6 sectors producing double-digit growth. This will be the most broad-based earnings growth performance in recent times.”

As seen in Figure 1, Zacks projects that full-year 2026 earnings and revenue growth will exceed those of both the immediately preceding and following years.

FIGURE 1: S&P 500 ANNUAL EARNINGS AND REVENUE GROWTH RATES

S&P 500 annual earnings and revenue growth rates for 2023–2025, with estimates for 2026–2028. Earnings growth is estimated at 27.6% and revenue growth at 9.7% for 2026.

Source: Zacks Investment Research

Related Article: Do oil price spikes derail stocks?

Earnings insights for Q3 2026

FactSet provides the following overview of projected results for the Q3 earnings season:

“Earnings Growth: For Q3 2026, the estimated (year-over-year) earnings growth rate for the S&P 500 is 28.7%. If 28.7% is the actual growth rate for the quarter, it will mark the third-straight quarter of earnings growth above 25% for the index.
“Earnings Revisions: On June 30, the estimated (year-over-year) earnings growth rate for the S&P 500 for Q3 2026 was 26.6%. Four sectors are expected to report higher earnings today (compared to June 30) due to upward revisions to EPS estimates.
“Earnings Guidance: For Q3 2026, 42 S&P 500 companies have issued negative EPS guidance and 72 S&P 500 companies have issued positive EPS guidance.
“Valuation: The forward 12-month P/E ratio for the S&P 500 is 19.1. This P/E ratio is below the 5-year average (19.8) but above the 10-year average (19.0).
“Earnings Scorecard: For Q3 2026 (with 2 S&P 500 companies reporting actual results), 2 S&P 500 companies have reported a positive EPS surprise and 2 S&P 500 companies [have] reported a positive revenue surprise.”

FIGURE 2: S&P 500 CHANGE IN FORWARD 12-MONTH EPS VS. CHANGE IN PRICE—10 YEARS

S&P 500 forward 12-month EPS and index price over the 10 years through September 2026, showing both measures rising substantially over the period.

Source: FactSet

FactSet adds further specifics on leading sectors for Q3:

“Heading into the final weeks of the quarter, analysts and companies have been more optimistic than normal in their earnings outlooks for the third quarter. As a result, estimated earnings for the S&P 500 for the third quarter are higher today compared to expectations at the start of the quarter. In addition, the index is expected to report earnings growth above 25% for the third-straight quarter. …

“All eleven sectors are projected to report year-over-year growth. Five of these eleven sectors are predicted to report double-digit growth, led by the Energy, Information Technology, Communication Services, and Materials sectors. …

“The Energy sector has recorded the largest percentage increase in estimated (dollar-level) earnings of all eleven sectors since the start of the quarter at +14.8% (to $54.0 billion from $47.0 billion). Rising oil prices are contributing to the increase in earnings for this sector, as the price of oil has increased by 47% since June 30 (to $102.48 from $69.50). As a result, the estimated (year-over-year) earnings growth rate for the sector has increased to 105.7% today from 79.3% on June 30. This sector has also recorded the largest increase in price of all 11 sectors since June 30 at +22.0%.”

FIGURE 3: PROJECTED S&P 500 EARNINGS GROWTH (Y/Y)—Q3 2026