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Data: FactSet; Chart: Axios Visuals

So far, second quarter earnings have beaten estimates" FactSet senior earnings analyst John Butters notes.

The big picture: With 9% of S&P 500 companies reporting so far, 73% have reported a positive EPS surprise and 78% have reported a positive revenue surprise.

But, but but: Earnings are still on pace to decline 44% in Q2, which would mark the largest year-over-year decline for the index since Q4 2008 (-69.1%).

Below the surface: The estimated net profit margin for the S&P 500 for the first quarter is 7.1% — the lowest net profit margin reported by the index since Q4 2009 and well below the 5-year average of 10.6%, according to FactSet.

State of play: All eleven S&P 500 sectors are reporting, or are projected to report, a year-over-year decline in net profit margins in the second quarter.

  • Analysts expect net profit margins to improve gradually over the next three quarters, however, they are not projecting year-over-year improvement until Q1 2021.

Editor’s note: This piece has been updated to clarify information attributed to John Butters.

Go deeper

Ben Geman, author of Generate
Oct 27, 2020 - Energy & Environment

BP ekes out profit despite pandemic's bite

Illustration: Aïda Amer/Axios

BP reported an $86 million third-quarter profit Tuesday — a result that beat analysts' expectations but nonetheless signals how the pandemic is weighing heavily on the industry.

Why it matters: It's the first of several earnings reports this week from oil-and-gas giants that provide the latest window on COVID-19's ongoing effect. Shell reports Thursday and U.S. giants Chevron and Exxon report Friday.

Updated 58 mins ago - Politics & Policy

Trump sues National Archives, Jan. 6 committee to block records request

Photo: Chip Somodevilla/Getty Images

President Trump filed a lawsuit Monday seeking to block the National Archives from releasing White House records to the House select committee investigating the Jan. 6 Capitol insurrection, citing executive privilege.

Why it matters: It's the latest escalation in Trump's campaign to disrupt the committee's sweeping probe into the circumstances surrounding Jan. 6, including his actions and communications leading up to the Capitol attack.

UNC race conscious admissions process upheld by judge

Students walk through the campus of the University of North Carolina at Chapel Hill on Aug. 18, 2020 in Chapel Hill, North Carolina. Photo: Melissa Sue Gerrits/Getty Images

The University of North Carolina at Chapel Hill can continue its race conscious admissions process, a federal judge ruled on Monday.

Why it matters: The case could end up in the Supreme Court after the conservative nonprofit Students for Fair Admissions (SFFA) vowed to appeal the judge's ruling that UNC didn't discriminate against against white and Asian American applicants in its policy that it said was designed to increase diversity.