Earnings Scoreboard - An industrial recovery at play?

 

Renée Friedman, Global Head of Research

Horacio Coutino, Multi-asset Strategist

“We woke up this morning with a very different set of fuel assumptions than we had when we went to bed... And so, until we have a better sense for where structurally we see oil landing, which we do believe will be higher for longer... we'll be in a better opportunity to guide.”

— Edward Herman Bastian, CEO of Delta Air Lines, Q1 earnings call, on 8 April. Who’s scoring highest and why

From 14 to 20 April, 28 S&P 500 companies (including 3 Dow Jones Industrial Average constituents, Johnson & Johnson, JPMorgan Chase, and Travelers Companies) reported earnings. As Q1 2026 earnings season begins, the picture so far has been more reassuring than many feared. The macro environment is becoming more sensitive, with stock movements now shaped by forward- looking commentary rather than past results. Reuters cautioned that Wall Street's optimistic outlook may face challenges as tariffs increase costs, geopolitical tensions rise, and slowing consumer demand reduces profit margins in the second half of the year.

As of 17 April, 93.5% of the 31 S&P 500 companies that have reported beat earnings expectations, while 74.2% surpassed revenue forecasts, signifying a strong beginning to this earnings season. According to FactSet, the blended Q1 earnings growth rate stands at 13.2%, higher than last week’s 12.6% and equal to the 13.2% growth rate projected at the end of Q1 on 31 March. This earnings season appears set to deliver the eleventh consecutive quarter of positive earnings growth for the index, as well as the sixth straight quarter of double- digit y/o/y earnings expansion.

The S&P 500 surprise factor is currently at 10.8%. This is above the average of 7.2% seen over the past four quarters and the five-year average of 7.3%. Within sectors, Communication Services leads with a 61.2% positive earnings surprise, while Real Estate has beaten estimates by 0.6%. Since the end of Q1, Financials has experienced the most significant improvement in earnings growth among all 11 sectors, shifting from a growth rate of 15.0% as of 31 March, to 19.7% today.

At this stage, the blended net profit margin for the S&P 500 for Q1 is projected to be 13.2%, higher than the year-ago net profit margin of 12.8% and equal to the previous quarter’s 13.2%.

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