Each week, Earnings Insight offers analysis of critical trends in the S&P 500. Here are key highlights of the fourth quarter 2025 earnings season.

Given concerns in the market about inflation and tariffs, did analysts lower EPS estimates more than normal for S&P 500 companies for the second quarter? The answer is yes. During the quarter, analysts lowered EPS estimates by a larger margin compared to the three most recent averages. The Q2 bottom-up EPS estimate (which is an aggregation of the median EPS estimates for Q2 for all the companies in the index) decreased by 4.2% (to $62.83 from $65.55) from March 31 to June 30.

At this late stage of the earnings season, the S&P 500 is reporting strong results for the first quarter. Both the percentage of S&P 500 companies reporting positive earnings surprises and the magnitude of earnings surprises are above their 10-year averages. As a result, the index is reporting higher earnings for the first quarter today relative to the end of last week and relative the end of the quarter. The index is also reporting double-digit earnings growth for the second consecutive quarter.

Periodic report on earnings trend of S&P500

The estimated earnings decline for the S&P 500 for the fourth quarter is -3.9%, which would mark the first year-over-year earnings decline reported by the index since Q3 2020 (-5.7%).

Industry analysts continue to trim their estimates for S&P 500 earnings for each of this year's four quarters. They may continue to do so if company managements provide cautious earnings guidance during the current earnings reporting season.

Analysts lowered their earnings estimates more than average for the fourth quarter for companies in the S&P/TSX Composite. On a per-share basis, estimated earnings for the fourth quarter decreased by 7.1% from September 30 to December 31.

The fourth quarter earnings season for the S&P 500 is not off to a strong start. To date, the number and magnitude of positive earnings surprises reported by S&P 500 companies are below their 5-year and 10-year averages. Overall, the index is reporting a year-over-year decline in earnings for the first time since Q3 2020.

While the majority of S&P 500 companies will report earnings results for Q4 2022 over the next few weeks, 4% of the companies in the index (20 companies) had reported earnings results for the fourth quarter through January 12.

For 2023, the bottom-up EPS estimate for the S&P 500 (which reflects an aggregation of the median EPS estimates for CY 2023 for all of the companies in the index) is $232.53. However, what is the likelihood that $232.53 will be the final EPS value for the S&P 500 in 2023?