Barclays: Share of US companies beating earnings expectations rises to 80%, but earnings upgrades remain concentrated in technology and energy

How strong are the results so far?

So far, 120 S&P 500 companies, accounting for 25% of the index’s market capitalization, have reported third-quarter results. Of these, 80% beat EPS expectations, up from 78% the previous week and slightly above the 79% median of the past decade.
Barclays notes that, historically, once companies representing 25% of the index’s market capitalization have reported, the current beat rate has had a strong correlation with the final result for the full reporting season. The bank is therefore more confident that earnings performance will not be a channel through which higher yields weigh on equities.
However, combining reported figures with expectations for companies yet to report gives third-quarter year-on-year EPS growth of 27.7%. Growth in financials, industrials and consumer staples slowed from the previous quarter, partly because of a higher comparison base.

Over the past week, consensus S&P 500 EPS estimates for 2026 and 2027 each rose by about 1 dollar, reaching 369 dollars and 422 dollars respectively, corresponding to year-on-year growth of 32.2% and 14.4%.
Semiconductors, hardware, and oil and gas have been the main contributors to upgrades to 2027 earnings expectations since the reporting season began; airlines, pharmaceuticals and most other industries have offset part of the increase. Barclays believes early results from representative technology and energy companies offer clues to further upgrades in the coming weeks.
Slower growth does not mean that all sectors are performing alike: industrials’ blended third-quarter EPS rose 13.8% year on year, above their 6.3% median over the past decade; consumer staples grew 4.7%, below their historical median of 5.7%.

SpaceX beat expectations and raised guidance in its first quarterly report since going public. Its chief financial officer said that, at current prices, newly deployed computing capacity pays for itself in less than a year, and current pricing per watt is slightly above the upper end of the 30 to 50 dollar range discussed in the previous quarter.
Together with TSMC’s earlier guidance increase and improving outlooks at Micron and Texas Instruments, Barclays believes visibility into AI investment remains good and technology-sector earnings estimates could continue to rise.
At the same time, the scale and complexity of AI financing are increasing. Meta created a class of publicly listed non-voting shares that can be used for financing, saying the move was intended to broaden funding sources; the company did not announce a specific financing plan at the time. Barclays believes strong earnings will be an important factor in offsetting financing pressure.

The report expects companies with a combined market capitalization of more than 25 trillion dollars to report results in the week of 26 October, making it the busiest week of this reporting season. Alphabet and Microsoft are expected to report on 28 October, and Amazon on 29 October; the schedule may change.
Results from these large technology companies and numerous industrial and healthcare companies will provide a broader test of the assessment currently based on a quarter of the index’s market capitalization.