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Second-quarter earnings season is coming to a close, and Goldman Sachs said that companies’ performance this time is one of the best ever. Of the 92% S & P 500 companies that have reported, 60% have beaten consensus earnings per share forecasts by more than a standard deviation of analyst estimates, according to data from the firm. That signifies the “highest rate in our 25 years of data history outside of 2009 and the COVID reopening,” it found. “With the 2Q 2025 earnings season nearly complete, the quarter has been marked by one of the greatest frequency of earnings beats on record,” wrote David Kostin, Goldman’s chief U.S. equity strategist, in a note dated Aug. 15. The bar for this reporting season was already set lower heading into it, the strategist said. Concerns around the impacts of President Donald Trump’s tariffs – which were announced at the start of the quarter and later pushed back – dampened Wall Street’s expectations. Kostin estimates that aggregate S & P 500 earnings per share rose 11% compared to last year, surpassing the 4% consensus expectation. “The outperformance largely resulted from the low bar set when analysts aggressively cut estimates this spring,” he wrote. He also said that profit margins for the S & P 500 have been “more resilient to tariffs than investors feared.” “While we expect companies will generally be able to mitigate tariff costs and maintain their profit margins, the magnitude of margin expansion embedded in consensus estimates appears unrealistic,” he continued. “We expect the strong recent trajectory of analyst earnings revisions to weaken going forward, but no more than the average downward trend of the last few decades.” This might be a double-edged sword, however, as this strong season has led to a ratcheting up of earnings per share forecasts for the future. Notably, 58% of companies hiked their 2025 guidance, double the share of firms that did so in the first quarter, Kostin said. Analysts did the same, upping their earnings estimates in most sectors for both this year’s second half as well as for 2026. To be sure, Kostin said that analysts still foresee a deceleration in S & P 500 earnings per share growth in the months ahead, dropping to 7% in the second half from 11% in the second quarter.
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