Second-quarter earnings season is coming to a close, with just a handful of S&P 500 companies yet to report their results. And the verdict for the quarter is in: It was a spectacular three months for the 500 largest U.S.-listed companies (which represent about 80% of total U.S. market capitalization).
About 90% of these companies have published their quarterly results. Of those, 86% reported a positive earnings surprise, i.e., their reported earnings exceeded Wall Street's expectations. That's according to FactSet, which tracks S&P 500 results. Similarly, three-quarters of the companies that reported results had a positive revenue surprise.
As for comparisons with the second quarter of the previous year (2025), the year-over-year earnings growth rate is 50.4% so far. If that figure remains (after the final few companies report), it will be the highest growth rate for the S&P 500 since the second quarter of 2021.
As for revenue, the companies that have reported so far have grown revenue 15% year over year. And if that figure holds, it will mark the highest revenue growth rate since the fourth quarter of 2021.
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All 11 sectors of the S&P 500 showed year-over-year revenue growth, and five sectors reported double-digit growth. The leading sectors for revenue growth were energy, information technology, and communication services.
The energy sector reported the highest revenue growth
Companies in the energy sector reported revenue growth of 42.5%, primarily due to higher oil prices stemming from the war in the Persian Gulf and the closure of the Strait of Hormuz. The average price of oil during the second quarter, about $93 per barrel, was 45% higher than in the second quarter of last year.
Within the energy sector, oil and gas refining and marketing companies reported the best revenue growth, 53% over last year. Refiner stocks have surged this year due to a global shortage of refining capacity.
Two technology companies -- Alphabet (GOOGL +0.62%) (GOOG +0.42%) and Amazon (AMZN -0.74%) -- impacted earnings growth the most in the quarter. FactSet estimates that excluding results from those two companies reduces the earnings growth rate for the quarter from 50.4% to 32%.
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Key Data Points
Alphabet reported earnings per share of $9.11, more than three times what Wall Street expected. Much of that unexpected gain was due to $98 billion in unrealized gains on equities, primarily the stock of Space Exploration Technologies (SPCX -2.58%), which went public in the second quarter. Similarly, Amazon reported $53.4 billion in income from the revaluation of its investment in AI developer Anthropic.
Interestingly, second-quarter earnings growth was boosted by several companies' investments in other firms, rather than by ordinary operating income.
Still, even without those one-time gains, both earnings and revenue growth were strong among S&P 500 companies, a very good signal for stock prices going forward.
