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Earnings Outlook Remains Very Strong: A Closer Look
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Key Takeaways
The 2026 Q1 earnings season gets busy next week, with 90 S&P 500 members on the reporting schedule.
The overall earnings outlook remains strong, with estimates expanding beyond the Tech sector.
Earnings for the 48 S&P 500 members that have reported so far are up 29.3% YoY on 12.4% higher revenues.
Q1 results from the roughly 10% of S&P 500 members that have already reported quarterly results validate the steadily improving earnings outlook we have consistently highlighted in our earnings commentary.
It is admittedly still very early in the Q1 reporting cycle, and the sample of results is heavily weighted towards the Finance sector, but we remain confident that the trends established already will endure through the remainder of this earnings season.
We get into the heart of the Q1 earnings season this week, with more than 300 companies on deck to report results, including 90 S&P 500 members. This week’s line-up includes a representative cross-section of all sectors, ranging from blue-chip operators like 3M, Boeing, and Procter & Gamble, consumer finance players like Synchrony, Capital One, and American Express (AXP - Free Report) , and Tech players like IBM and Texas Instruments. Also on deck this week is Tesla (TSLA - Free Report) , homebuilders, airlines, railroad operators and oilfield service leaders like Halliburton (HAL - Free Report) .
By the end of this week, we will have seen Q1 results from more than 27% of all S&P 500 members.
The chart below shows current 2026 Q1 earnings and revenue growth expectations in the context of where growth has been in the preceding five quarters and what is expected in the coming four quarters.
Image Source: Zacks Investment Research
Regular readers of our earnings commentary are familiar with the steadily improving earnings outlook we have consistently highlighted over the past year. This 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.
What has changed over the last couple of quarters is that the positive revisions trend has expanded beyond its aforementioned Tech sector core. We saw this ahead of the start of this earnings season as well as the one prior to that. We will be closely monitoring how estimates for 2026 Q2 evolve as we go through the Q1 earnings season.
As you can see in the above chart, the current expectation is of +19.4% earnings growth in 2026 Q2 on +9.1% higher revenues. The chart below shows how these expectations have evolved in recent weeks.
Image Source: Zacks Investment Research
Estimates have moved higher for 5 of the 16 Zacks sectors since the quarter began two weeks ago. Q2 estimates have increased for Tech, a trend that has persisted for more than a year now. Still, estimates have also moved higher for the Energy, Basic Materials, Utilities, and Business Services sectors.
Rising estimates for the Energy sector are tied to developments in the Middle East, with the sector’s favorable revisions trend likely to turn negative again if current optimism about the Iran conflict bears fruit.
On the negative side, Q2 estimates have been cut for 11 of the 16 Zacks sectors since the start of the quarter, with the most estimates pressure at the Transportation, Autos, and Consumer Discretionary sectors.
2026 Q1 Earnings Season Scorecard
Through Friday, April 17th, we have seen Q1 results from 48 S&P 500 members or 9.6% of the index’s total membership. Total earnings for these 48 index members are up +29.3% from the same period last year on +12.4% higher revenues, with 79.2% beating EPS estimates and an equal proportion beating revenue estimates.
The comparison charts below put the growth rates for the companies that have reported with what we had seen from this same group of companies in other recent periods.
Image Source: Zacks Investment Research
The comparison charts below show the Q1 EPS and revenue beats percentages for this group of companies relative to what we had seen from them in other recent periods.
Image Source: Zacks Investment Research
The chart below shows how net margins for the 48 index members that have reported Q1 results compare to other recent periods for this same group of companies.
Image Source: Zacks Investment Research
The Cyclical – Non-cyclical Divide
The two sets of charts below divide the S&P 500 index into cyclical and non-cyclical sectors, with cyclical sectors accounting for 43.2% of total 2026 Q1 index earnings and non-cyclical sectors accounting for 56.8%.
The cyclical grouping includes the 11 Zacks, out of the 16 in the index, that can broadly be described as ‘cyclical’. These include Consumer Discretionary, Retail, Autos, Basic Materials, Industrials, Construction, Conglomerates, Energy, Finance, Transportation, and Business Services.
Image Source: Zacks Investment Research
The non-cyclical grouping includes Consumer Staples, Medical, Technology, Aerospace, and Utilities.
Image Source: Zacks Investment Research
The chart below shows the overall earnings picture on a calendar-year basis, with double-digit earnings growth expected in 2026 (and the next two years).
Image Source: Zacks Investment Research
For a detailed look at the overall earnings picture, including expectations for the coming periods, please check out our weekly Earnings Trends report >>>>Q1 Earnings Season Starts Off Strong
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Earnings Outlook Remains Very Strong: A Closer Look
Key Takeaways
Q1 results from the roughly 10% of S&P 500 members that have already reported quarterly results validate the steadily improving earnings outlook we have consistently highlighted in our earnings commentary.
It is admittedly still very early in the Q1 reporting cycle, and the sample of results is heavily weighted towards the Finance sector, but we remain confident that the trends established already will endure through the remainder of this earnings season.
We get into the heart of the Q1 earnings season this week, with more than 300 companies on deck to report results, including 90 S&P 500 members. This week’s line-up includes a representative cross-section of all sectors, ranging from blue-chip operators like 3M, Boeing, and Procter & Gamble, consumer finance players like Synchrony, Capital One, and American Express (AXP - Free Report) , and Tech players like IBM and Texas Instruments. Also on deck this week is Tesla (TSLA - Free Report) , homebuilders, airlines, railroad operators and oilfield service leaders like Halliburton (HAL - Free Report) .
By the end of this week, we will have seen Q1 results from more than 27% of all S&P 500 members.
The chart below shows current 2026 Q1 earnings and revenue growth expectations in the context of where growth has been in the preceding five quarters and what is expected in the coming four quarters.
Image Source: Zacks Investment Research
Regular readers of our earnings commentary are familiar with the steadily improving earnings outlook we have consistently highlighted over the past year. This 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.
What has changed over the last couple of quarters is that the positive revisions trend has expanded beyond its aforementioned Tech sector core. We saw this ahead of the start of this earnings season as well as the one prior to that. We will be closely monitoring how estimates for 2026 Q2 evolve as we go through the Q1 earnings season.
As you can see in the above chart, the current expectation is of +19.4% earnings growth in 2026 Q2 on +9.1% higher revenues. The chart below shows how these expectations have evolved in recent weeks.
Image Source: Zacks Investment Research
Estimates have moved higher for 5 of the 16 Zacks sectors since the quarter began two weeks ago. Q2 estimates have increased for Tech, a trend that has persisted for more than a year now. Still, estimates have also moved higher for the Energy, Basic Materials, Utilities, and Business Services sectors.
Rising estimates for the Energy sector are tied to developments in the Middle East, with the sector’s favorable revisions trend likely to turn negative again if current optimism about the Iran conflict bears fruit.
On the negative side, Q2 estimates have been cut for 11 of the 16 Zacks sectors since the start of the quarter, with the most estimates pressure at the Transportation, Autos, and Consumer Discretionary sectors.
2026 Q1 Earnings Season Scorecard
Through Friday, April 17th, we have seen Q1 results from 48 S&P 500 members or 9.6% of the index’s total membership. Total earnings for these 48 index members are up +29.3% from the same period last year on +12.4% higher revenues, with 79.2% beating EPS estimates and an equal proportion beating revenue estimates.
The comparison charts below put the growth rates for the companies that have reported with what we had seen from this same group of companies in other recent periods.
Image Source: Zacks Investment Research
The comparison charts below show the Q1 EPS and revenue beats percentages for this group of companies relative to what we had seen from them in other recent periods.
Image Source: Zacks Investment Research
The chart below shows how net margins for the 48 index members that have reported Q1 results compare to other recent periods for this same group of companies.
Image Source: Zacks Investment Research
The Cyclical – Non-cyclical Divide
The two sets of charts below divide the S&P 500 index into cyclical and non-cyclical sectors, with cyclical sectors accounting for 43.2% of total 2026 Q1 index earnings and non-cyclical sectors accounting for 56.8%.
The cyclical grouping includes the 11 Zacks, out of the 16 in the index, that can broadly be described as ‘cyclical’. These include Consumer Discretionary, Retail, Autos, Basic Materials, Industrials, Construction, Conglomerates, Energy, Finance, Transportation, and Business Services.
Image Source: Zacks Investment Research
The non-cyclical grouping includes Consumer Staples, Medical, Technology, Aerospace, and Utilities.
Image Source: Zacks Investment Research
The chart below shows the overall earnings picture on a calendar-year basis, with double-digit earnings growth expected in 2026 (and the next two years).
Image Source: Zacks Investment Research
For a detailed look at the overall earnings picture, including expectations for the coming periods, please check out our weekly Earnings Trends report >>>>Q1 Earnings Season Starts Off Strong