S&P 500 Earnings Season: 83% of Early Reporters Beat EPS Estimates, 23 Companies Post YoY Earnings Growth
nashnova research
Of the 24 S&P 500 companies that have reported so far, 83% beat EPS estimates and 23 grew profits year-on-year — yet bank stocks sold off almost across the board, signaling that the market is grading this earnings season on a tougher curve.
What do the first 24 report cards tell us?
Of the 24 companies reporting: 20 beat EPS estimates, 3 missed, 1 matched — an 83% beat rate.
Revenue was more mixed: 15 beat, 9 missed, but 20 still posted year-on-year growth.
This means → Profitability is broadly strong, but the *quality* of revenue growth is uneven — companies are earning more through efficiency, not a broad demand rebound.
Banks beat on profit — so why did their stocks drop?
JPMorgan posted EPS of $5.57 and revenue of $50.9 bn, both below expectations; investment-banking weakness was the drag, though net interest income hit a strong $27.1 bn and full-year NII guidance rose to ~$97.2 bn. Shares fell 0.9% after hours.
Bank of America's EPS of $1.08 narrowly missed estimates; NII rose 8% year-on-year to $16.6 bn, but a $1.2 bn Treasury anti-money-laundering fine dragged GAAP EPS down to $0.91. Shares fell 4.76%.
Citigroup's EPS of $2.85 beat estimates, and revenue of $23.8 bn marked its best Q3 in a decade; the dividend-return target rose above 11% — yet shares still fell 5.60%.
In plain terms = Banks are earning well on the interest-rate spread, but investment-banking fees are shrinking and fines are eating into profits. The market's real worry: how long can the NII tailwind last?
Investment banks and asset managers — who actually won?
Goldman Sachs posted EPS of $17.01 and revenue of $18.7 bn, both above estimates. Equities trading revenue surged 72% year-on-year to $6.44 bn; annualized ROE hit 18.7%. Shares were roughly flat.
Morgan Stanley beat with EPS of $3.03 and record wealth-management revenue; total client assets reached $10.5 tn. Shares still fell 2.75%.
BlackRock was the standout: EPS of $15.93 crushed estimates, AUM rose to $15.49 tn on $206 bn in net inflows, and the operating margin widened to 47.8%. Shares rose 0.72%.
This means → Trading and asset-management businesses are recovering, but the market only rewards companies expanding both scale *and* margin simultaneously. Morgan Stanley earned more but didn't rally — expectations were already priced in.
Healthcare giants beat estimates — why did they fall too?
Johnson & Johnson's adjusted EPS of $2.59 and sales of $25.4 bn (+5.9% YoY) both topped estimates; full-year guidance was raised. But a $5.5 bn pre-tax talc-litigation provision crushed GAAP EPS to just $0.09. Shares fell 5.73%.
In plain terms = The core business is fine, but one massive legal charge nearly zeroed out reported profit — investors fear the *uncertainty* of ongoing litigation more than any single quarter's result.
UnitedHealth's EPS surged 61% year-on-year to $4.69; full-year guidance was raised to at least $20.50. Revenue dipped 0.4% (driven by deliberate shedding of unprofitable members). Shares slipped just 0.2%.
What should we watch next?
Earnings season accelerates next week: Tesla, General Motors, and major tech, industrial, defense, and energy names all report.
This reflects a bigger point — the real pricing anchor for this earnings season hasn't appeared yet. Banks and healthcare were the appetizer; tech and autos are the test of economic resilience.
This means → If even "beating estimates" can't lift stock prices, the margin for error in next week's high-valuation sectors will be even thinner.
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