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S&P 500 companies' earnings in the second quarter have been historically good and also historically bad.

What's happening: Earnings are still on pace to be awful, but they are handily beating even more awful expectations from analysts.

On one side: With 439 companies, or 90%, having reported, Q2 earnings per share have beaten expectations by a record 17%, with an all-time-high 59% of companies beating on both EPS and sales, according to an analysis by Bank of America.

  • FAANG earnings beat by close to 50%, contributing 25% of the overall S&P beat.
  • 83% of S&P 500 companies have reported a positive EPS surprise for Q2 to date, the highest percentage since FactSet began tracking this metric in 2008.

On the other side: S&P 500 EPS is on pace to decline by 28.7% year to date for the first half of the year, the largest first half decrease since FactSet began tracking annual bottom-up EPS estimates in 1996.

  • Earnings for Q2 are on pace to decline 33.8%, which would mark the largest year-over-year decline in earnings since Q1 2009 (-35.4%).
  • Earnings had been on pace for the worst quarter since Q4 2008 when earnings fell by 69%.

The S&P's forward 12-month P/E ratio also remains historically stretched at 22.3, well above the 5-year average (17.0) and the 10-year average (15.3) for the index.

Go deeper

Ina Fried, author of Login
Oct 30, 2020 - Economy & Business

The pandemic isn't slowing tech

Illustration: Eniola Odetunde/Axios

Thursday's deluge of Big Tech earnings reports showed one thing pretty clearly: COVID-19 may be bad in all sorts of ways, but it's not slowing down the largest tech companies. If anything, it's helping some companies, like Amazon and Apple.

Yes, but: With the pandemic once again worsening in the U.S. and Europe, it's not clear how long the tech industry's winning streak can last.

Oct 29, 2020 - Technology

Alphabet revenue up 14% after second-quarter slump

Illustration: Lazaro Gamio/Axios

Google parent company Alphabet beat Wall Street expectations in the third quarter of 2020, announcing total revenues of $46.2 billion with its shares rising more than 9% in after-hours trading.

Why it matters: The company rebounded with its revenue up 14% after a tough second quarter, when its saw its first-ever revenue decline attributable to a lowered advertising growth rate amid the COVID-19 pandemic.

Amazon posts strong Q3 results despite ongoing pandemic costs

Photo: Ina Fassbender/AFP via Getty Images

With the pandemic driving consumers to shop online, Amazon beat analyst expectations on Thursday with its Q3 results, though its stock price didn't see much of a bump.

Why it matters: Despite incurring what it estimates was about $2.5 billion in pandemic-related costs during the quarter, Amazon's revenue grew 37% year-over-year to $96.1 billion and its profits to $6.3 billion, up 197% year-over-year.

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