LIVE MARKETS- Q2 US earnings growth now seen as lowest for 2025

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Q2 US EARNINGS GROWTH NOW SEEN AS LOWEST FOR 2025

With first-quarter earnings now in the rearview mirror, investors will soon start preparing for the second-quarter reporting season, and so far it's looking like a weaker quarter.

Analysts at this point are estimating, according to LSEG data on Friday, S&P 500 earnings growth for the second quarter of just 5.6%, which would be the lowest year-over-year growth for 2025 compared with first quarter growth and estimates for the remainder of the year.

Analysts had estimated Q2 growth of 10.2% back on April 1. Estimates for rest of 2025's quarter have also fallen since the start of April.

Much uncertainty remains about U.S. President Donald Trump's trade war and its impact on the earnings outlook. But, also, estimates overall tend to fall ahead of an earnings reporting period and rise as most companies give better-than-expected results.

First-quarter earnings growth is now at 13.7% year-over-year, based on LSEG data. It had been estimated at 8% at the start of April.

The market posted sharp gains in May, and investors saw "a strong earnings season from companies that needed to continue to justify their premium prices," Jeff Buchbinder, chief equity strategist for LPL Financial, writes in a note this week.

He adds: "Information technology and communication services were standouts, having the highest percentage of companies reporting above-consensus revenue."

After healthcare, communications services and then technology had the strongest year-over-year earnings growth rates in the first quarter, based on LSEG data.

(Caroline Valetkevitch)

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