A New Earnings Season Is Almost Here. Analysts Are Growing Cautious.

First-quarter earnings season is almost upon us. And Wall Street analysts have been taking a knife to their earnings estimates. 

It’s typical for analysts to pull back their earnings estimates for the companies they follow during a quarter, according to a FactSet analysis released Friday, but they did so to a larger-than-usual degree in the first three months of 2025.

Investors are looking for clues as to the health of the U.S. economy amid tariff-driven market turmoil. More S&P 500 companies have been turning in first-quarter outlooks below analysts’ consensus projections, FactSet has found. A fresh round of earnings starts next week, with results from big banks on tap.

The bottom-up earnings per share estimate for all the companies in the S&P 500—which aggregates the median estimate for all the companies in the index—fell by 4.2% between the start and end of the quarter, according to FactSet’s Senior Earnings Analyst John Butters. That translated to a drop from $62.89 to $60.23 per share. 

That percentage decrease is more than the averages for the past five, 10 and 15 years, Butters wrote, though in line with the 20-year average. 

Analysts’ full-year estimates fell 1.6%, to $269.67 from $274.12 per share, also marking a bigger retreat than the averages in the past five, 10 and 15 years, though smaller than the 20-year average.

The S&P’s financials sector is the only one to see its full-year EPS estimate rise during the first quarter, FactSet said.