In this note, we preview the Q3 earnings season in granular detail for U.S. large-caps, providing both aggregate and company-level insights using data from I/B/E/S, StarMine, and Datastream, which are all found in the desktop solution LSEG Workspace. To download the full report – click here.
Corporate earnings momentum shows no signs of slowing. Full-year 2025 profits are projected to climb 10.8%, followed by an even stronger 14.1% in 2026. If realized, this would mark three consecutive years (2024–2026) of double-digit earnings growth – a feat not seen in over two decades.
Using the October 10th publication of the S&P 500 Earnings Scorecard, earnings are forecasted to grow 8.8% in Q3, marking the ninth consecutive quarter of positive earnings growth. This represents a 5-percentage point decline from Q2, marking the largest quarter-over-quarter decline since 2022 Q4. Part of this moderation can be explained by tougher year-over-year comparisons. The median earnings growth rate is 5.4%, lower than the prior quarter’s median of 9.1% in Q2 and 6.8% in Q1.
Using StarMine SmartEstimates®, the Q3 blended growth rate for the S&P 500 stands at 8.6%, broadly in line with consensus. Financials show a SmartEstimate growth rate of 15.4% compared to a consensus growth rate of 14.2%, highlighting a greater probability of positive earnings surprises. In contrast, Health Care has the largest negative spread (-4.7% Smart Growth vs. -1.0% consensus), while Energy is also expected to underperform, with SmartEstimates pointing to an -8.6% decline compared to a consensus of -6.2% (Exhibit 1).
Breadth remains strong and skewed to the upside, with six sectors expected to post positive earnings growth. Five of these – Technology, Real Estate, Financials, Materials, and Industrials, are forecasted to deliver double-digit growth. In contrast, five sectors are projected to see negative growth, though none are expected to decline by more than six percent. Financials are expected to post positive earnings growth for the 11th consecutive quarter – the longest streak among all sectors – followed by Technology and Communication Services at 10 consecutive quarters. In contrast, Energy is projected to record its fifth straight quarter of negative earnings growth.
To download the full report – click here.
