Earnings Scoreboard - From euphoria to discipline

“Commodity/driven inflation that is not easy to remedy with monetary policy. So I... can bring Albert Einstein to the Fed. That won't have an effect... So we have toworry about these episodes.”

— Nassim Taleb, on Bloomberg Television, on 23rd February, 2026. 

Who’s scoring highest and why

From 23rd to 27th February, 55 S&P 500 companies (including 3 Dow Jones Industrial Average constituents, Nvidia, Salesforce and Home Depot) reported earnings. We're at the end of Q4 2025 earnings season, and the picture so far has been more reassuring than many feared. However, the rotation that commenced in Q4 has intensified this earnings season and this week was no exception. Nvidia reported a terrific quarter, yet its shares experienced a terrible reaction as markets questioned hyper-scalers’ FCF sustainability.

As of 27th February, 72.4% of the 479 S&P 500 companies that have reported beat earnings expectations, while 72.7% surpassed revenue forecasts, signifying a strong end to this earnings season. According to FactSet, the blended Q4 earnings growth rate stands at 14.2%, higher than last week’s 13.2%, higher than 13.0% two weeks ago, and higher than the 8.3% projected at the end of Q4 on 31st December. This earnings season appears set to deliver the tenth consecutive quarter of positive earnings growth for the index, as well as the fifth straight quarter of double-digit y/o/y earnings expansion. The S&P 500 last saw four straight quarters of double-digit earnings growth throughout 2021.

The S&P 500 surprise factor is currently at 6.8%. This is below the average of 7.3% seen over the past four quarters and the five-year average of 7.7%. Within sectors, Industrials leads with a 28.6% positive earnings surprise, while Utilities has fallen short of estimates by 1.6%. Since the end of Q4, Industrials has experienced the most significant improvement in earnings growth among all 11 sectors, shifting from a projected decrease of 0.3% as of 31st December, to 26.8% today.

At this advanced stage, the blended net profit margin for the S&P 500 in Q4 is forecasted to reach 13.3%, surpassing last year's figure of 12.7%. This would represent the highest net profit margin recorded by the index since FactSet initiated tracking of this metric in 2009.

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