Q3 earnings are here and if history is any guide, that means it’s time for Corporate America to smash forecasts, raise the bar, and then proceed to smash those revised estimates again. And again. And again.

I don’t make the rules, this is just what has happened for the better part of two years.

I’ve written about it before, but part of my responsibilities at Ritholtz Wealth include putting together a weekly summary of how S&P 500 companies are reporting during earnings season. It’s great content for the shows, my research partner Sean Russo can leverage them in Josh’s CNBC notes, and it helps keep our team up to date with how companies are reporting during the season in real-time.

At the beginning of Q2 (last quarter) I wrote in our Slack channel: “this is the first time looking at the preseason data where I'm saying that these numbers look too high.”

Dumb comment. Fast forward three months and Corporate America had reported 31.8% earnings growth, nearly 800 bps above estimates at the beginning of the season.

So let’s just say… I won’t be making the same mistake twice.

Looking at Q3 numbers, analysts expect 24.6% YoY earnings growth.

10 out of 11 sectors are expected to report an increase in profits.

But what’s catching my eye this quarter is the revenue growth.

Every single sector is expected to report an increase in revenue on a YoY basis. Tech is expected to grow sales by 40.6%. WTF? You can get nifty with the bottom line, but hard to fake revenue growth.

Every single sector is expected grow the top line.

Lastly, the chart below shows the actual earnings growth for the companies in each sector that have reported thus far.

It’s easy to look at these numbers and think “no way.” Trust me, I did it last quarter. Hand up.

But I won’t be making that same mistake again.

I’ll check in at the end of the season to let you guys know how it went.

Here’s an unrelated, but interesting chart that Josh had me make last week.

The chart shows the 10-year yield on top with the Nasdaq 100 forward PE below.

The takeaway here is that the Nasdaq’s forward PE ratio topped around the same time that yields started surging.

What’s insane is that the forward PE contracted 25%, but the index is only 5.5% off a high. That’s because expected earnings growth has made up the difference.

In 2026, it’s the “E” that’s offsetting “P/E.”

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