Fourth-Quarter Earnings Are Beating the Street’s Estimates. Here’s How Much

Fourth-quarter earnings are coming in stronger than Wall Street expected. 

Through Friday, with the latest quarterly results in from more than three-fifths of the S&P 500, 77% have turned in earnings per share higher than analysts expected, according to FactSet. That’s in line with the five-year average, and a bit higher than the 10-year average.

The blended average for year-over-year earnings growth—combining numbers already in the books and expectations for the companies yet to report—is over 16%, FactSet said, up from nearly 12% in the third quarter. If current levels hold, it would mark the best performance by that measure since the last quarter of 2021. 

Revenue is coming in a bit cooler relative to estimates. FactSet says 63% of companies have beaten revenue estimates, below both the five and 10-year averages. 

“Factors driving these earnings gains include solid economic growth, massive AI investment, related increases in productivity, which boost margins, and deregulation, particularly for financial and energy companies,” according to a Monday note from LPL Financial. “Tariffs will offset some of these positive earnings drivers, though to what degree is an open question.”

Executives in their earnings conference calls are expressing uncertainty about the Trump administration’s trade policy and how it might affect their businesses. The number of companies mentioning tariffs is on pace to touch the highest level in 10 years, according to a FactSet analysis. 

Another busy week of earnings reports is on its way. McDonald’s (MCD) reported its results today; numbers from Coca-Cola (KO), Shopify (SHOP), Cisco (CSCO), and Airbnb (ABNB) are among those due later this week.