S&P 500: 11 Stocks Completely Crushed This Earnings Season

When it comes to corporate earnings, good isn’t good enough. What matters is making more than anyone expected — a feat a select group of S&P 500 companies just pulled off.

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Eleven profitable companies in the S&P 500 — including Paramount Global (PARA), Constellation Energy (CEG) and Amazon.com (AMZN) — crushed analysts’ profit forecasts for the just-reported second quarter by 70% or more, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.

And this makes them standouts in a pretty competitive field. More than 85% of S&P 500 companies reported second-quarter results, says John Butters of FactSet. And 79% of those beat earnings forecasts — which tops the 73% of those that did in the previous 10 years on average.

“Both the number of companies reporting positive earnings surprises and the magnitude of these earnings surprises are above their 10-year averages,” Butters says.

S&P 500 Investors Needed Good News

Coming into the quarter, S&P 500 investors were hoping companies would do better than they feared. And in many ways, they did.

Back in June, investors expected S&P 500 earnings would fall 7% during the second quarter, says FactSet. But now — with most S&P 500 results in and coming in stronger than thought — S&P 500 profit is only down 5.2% from the second quarter of 2022. And that’s mostly due to bigger-than-expected surprises. S&P 500 companies, on average, topped earnings expectations by 7.2%.

Sure, that was a relief for investors. But not enough of one. Shares of S&P 500 companies that topped earnings expectations in the second quarter actually fell 0.5%, FactSet says, vs. the typical 1% gain.

To impress in the second quarter, you had to beat by more. And some S&P 500 companies managed to pull it off.

Meme Stock Makes Good

Paramount Global, the Hollywood company swept up in the meme stock rally, actually out-delivered during the second quarter.

The company reported a quarterly profit of 10 cents a share, topping views calling for the firm to lose 2 cents a share during the period. That’s a beat of 671% on an adjusted basis, which is the largest positive earnings surprise in the S&P 500.

Investors, though, are still skeptical that there’s a sequel on the way. Paramount Global’s stock is down 3% this year. The company’s earnings are expected to drop 68% this year to 55 cents a share. A profit bounce isn’t seen coming until 2024, when analysts expect earnings to swell by 156%.

Other Huge S&P 500 Surprises

When it comes to profits that blow past estimates, Constellation Energy served up a huge surprise. The Baltimore-based electric utility turned a quarterly profit of $3.67 a share. That topped views for 78 cents by 370%. No wonder shares of the electric utility are up nearly 22% this year. And that’s on top of a 1.1% dividend yield.

What about the Magnificent Seven stocks in the S&P 500? The standout there is online retailer Amazon.com. The company earned 65 cents a share in the period, topping views by more than 91%. And it’s a good thing, too. Shares of Amazon are already up a whopping 67% this year.

So while investors feared the worst in the second quarter, plenty of S&P 500 companies still delivered — and then some.

Biggest S&P 500 Earnings Upside Surprises

In the second quarter of 2023

Sources: S&P Global Market Intelligence, IBD, *-adjusted for year-ago loss

Follow Matt Krantz on Twitter (X) @mattkrantz