Earnings Scoreboard - The Permian Basin: capital discipline vs downcycle

 

Renée Friedman, Global Head of Research

Horacio Coutino, Multi-asset Strategist

“As I've said before, and I will say again, McDonald's is not going to get beat on value and affordability. It's in our DNA and we will remain agile to respond as appropriate to a dynamic competitive landscape.”

— Christopher J. Kempczinski, Mcdonald’s Chairman and CEO, on the company’s Q4 earnings call, on11th February, 2026.

Who’s scoring highest and why

From 9th to 17th February, 95 S&P 500 companies (including 3 Dow Jones Industrial Average constituents, Cisco, McDonald's, The Coca-Cola Co.) reported earnings. We're deep in Q4 2025 earnings season and the picture so far has been more reassuring than many feared. However, Bloomberg Intelligence data showed earlier in the season that companies beating profit estimates were seeing the worst relative stock-price reactions since 2017 — because in a market priced for perfection, a beat without stellar forward guidance is a ‘sell- the-news’ event. This trend has persisted throughout this earnings season and may signal fatigue in sectors where valuations aren’t supported by an acceleration of earnings growth or upbeat guidance.

As of 13th February, 74.5% of the 369 S&P 500 companies that have reported beat earnings expectations, while 72.6% surpassed revenue forecasts, signifying a strong beginning to this earnings season. According to FactSet, the blended Q4 earnings growth rate stands at 13.2%, higher than last week’s 13.0%, higher than 11.9% 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 7.2%. 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 30.5% positive earnings surprise, while Materials has fallen short of estimates by 0.9%. 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 26.0% today.

At this stage, the blended net profit margin for the S&P 500 for Q4 is projected to be 13.2%, slightly higher than the year-ago net profit margin of 12.7%.

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