Summary of US500 Earnings Report - February 2026

The US500 index has shown a slight rebound following a recent sell-off, as the Q4 2025 earnings season progresses. With 74% of S&P 500 companies having reported their earnings, the results indicate a robust performance in both profits and revenues, suggesting that the earnings cycle remains in expansion mode.

Earnings Performance

As of February 13, 2026, the earnings report reveals that:

• 74% of companies reported a positive earnings per share (EPS) surprise.
• 73% exceeded revenue expectations.
• Blended earnings growth for Q4 2025 stands at 13.2% year-over-year, marking the fifth consecutive quarter of double-digit earnings growth.
• Blended revenue growth has reached 9.0% year-over-year, the highest since Q3 2022.

Sector Contributions

Several sectors have significantly contributed to the positive revisions in revenue growth:

• Information Technology: Revenue growth increased to 20.6%, driven by strong performances from Apple, Super Micro Computer, and Microsoft.
• Health Care: Growth rose to 10.3%, with notable contributions from Cigna, CVS, Eli Lilly, and Centene.
• Communication Services: Growth accelerated to 12.2%, aided by Alphabet and Meta.
• Industrials: Growth improved to 7.8%, with Boeing, RTX, and Caterpillar leading the charge.

Market Outlook

Looking ahead, guidance for Q1 2026 is mixed, with 31 companies issuing negative EPS guidance compared to 38 with positive guidance. The overall sentiment remains cautious, particularly given the high valuations in the market. The S&P 500’s forward 12-month price-to-earnings (P/E) ratio is currently at 21.5, above historical averages, indicating that investors are paying a premium for quality and predictability.

Future Projections

Consensus estimates suggest earnings growth of 11.1% in Q1 2026 and 14.9% in Q2 2026, with a full-year growth projection of 14.4%. However, revenue growth is expected to normalize, with forecasts of 8.7% in Q1 2026 and gradually decreasing in subsequent quarters. This normalization at elevated valuations implies a smaller margin for error in the market.

Conclusion

The current earnings season has reinforced the narrative of a healthy earnings cycle, but it has also highlighted the importance of sustainable growth and the quality of earnings surprises. As more companies report in the coming weeks, the focus will be on whether the momentum can be maintained amidst high valuations and a potential cooling of growth rates.