Earnings Scoreboard - Will AI momentum continue?

 

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 21 to 27 April, 101 S&P 500 companies (including 8 Dow Jones Industrial Average constituents, 3M, American Express, Boeing, Honeywell International, IBM, Procter & Gamble, UnitedHealth and Verizon) reported earnings. As Q1 2026 earnings season continues, the picture so far has been stronger than many anticipated. Companies that are directly aligned with structural tailwinds, such as AI infrastructure, defence rearmament, the aftermarket aerospace cycle and domestic industrial reshoring, are delivering results that exceed expectations, while companies navigating macro headwinds (fuel costs, tariffs, consumer pressure) are printing beats on the headline, but withdrawing or adjusting guidance. The season is increasingly bifurcated.

As of 24 April, 81.3% of the 139 S&P 500 companies that have reported beat earnings expectations, while 77.4% surpassed revenue forecasts, extending a strong beginning to this earnings season. According to FactSet, the blended earnings growth rate for Q1 is now 15.1%, which is an increase from last week's rate of 13.2% and also higher than the 13.2% growth anticipated at the close 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 12.3%. This is above the average of 7.2% seen over the past four quarters and the five-year average of 7.3%. Within sectors, Industrials leads with a 33.2% positive earnings surprise, while Consumer Staples has beaten estimates by only 3.0%. Since the end of Q1, Industrials has experienced the most significant improvement in earnings growth among all 11 sectors, shifting from a projected growth rate of 3.0% as of 31 March, to 16.7% today.

At this stage, the blended net profit margin for the S&P 500 for Q1 is projected to be 13.4%, higher than the year-ago net profit margin of 12.8% and the previous quarter’s 13.2%. This would be the highest net profit margin recorded by the index since FactSet started tracking it in 2009.

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