Q2 2025 Earnings Preview: Modest Growth Expected Amidst Economic Crosswinds

by Christine Short of Wall Street Horizon, 7/15/25

Takeaways

  • S&P 500® EPS growth expected to come in at 4.8% for Q2, which would be the lowest growth rate since Q4 2023.

  • Banks unofficially kick off the season when JPMorgan Chase, Wells Fargo and Morgan Stanley release results on Tuesday

  • Q2 peak earnings season falls between July 28 - August 15

As the second quarter earnings season kicks into gear, Wall Street analysts are forecasting modest earnings growth of 4.8% for companies in the S&P 500. According to FactSet, this would be the lowest YoY growth rate since Q4 2023 (4.0%).1 Despite potentially posting the lowest growth rate in six quarters, 4.8% would still reflect resilient corporate performance, particularly in the technology sector, against a backdrop of persistent macroeconomic headwinds, including elevated interest rates, a cooling labor market, and ongoing trade policy uncertainty.

Early Earnings Reports Off to a Mixed Start

While many associate the big bank reports with the unofficial kick off of earnings season, it’s important to note that we’ve already gotten results from 20 S&P 500 companies that can give us clues as to how the season will progress.

Those early reports have painted a mixed picture of the US economy and the health of corporate America. Early standouts include Micron and Delta, while less impressive results came from FedEx and Nike.

Micron reported a significant beat on both revenue and earnings, driven by surging demand and pricing for its memory chips, yet another sign that AI demand is back in full force and not cooling anytime soon. However, their consumer segment told a different story. While the AI story was stellar, management noted that the markets for traditional memory used in PCs and smartphones remain lackluster, showing a clear divergence in technology spending. All-in guidance was bullish, with Micron projecting continued strength in pricing and AI-related demand.2

Delta Airlines was one of the few consumer related names to report thus far to show robust demand. After a lackluster Q1 report, and a downgrade to expectations, everything is coming up roses in Q2. The international carrier reported earnings and revenue that topped analyst estimates, showcasing the continued strength in travel demand. The airline saw increasing demand for summer travel, particularly in its premium cabin and transatlantic routes. Consumers are still prioritizing experiences and travel over goods.3

On the flipside, Nike and FedEx didn’t paint as robust a picture of the US consumer. FedEx offered a cautious but stabilizing view of the second half. The logistics giant delivered earnings per share that narrowly beat analyst expectations, while revenue was largely in-line with forecasts. The primary driver of those results was massive cost-cutting. FDX saw continuing volume weakness in overall shipping volumes, but particularly in their higher-margin Express segment. Management provided a guarded outlook for the upcoming fiscal year, signaling expectations for continued slow global economic growth.4

Nike presented an even more challenging picture, reflecting the pressures on the global consumer. Nike missed revenue expectations, although earnings per share were slightly ahead of consensus due to disciplined cost management. The revenue miss was driven by softness in North America and a mixed recovery in China. Management spoke of a more "promotional environment" to clear through inventory, signaling weaker consumer appetite for full-price discretionary goods. As such, the footwear giant provided disappointing guidance for the upcoming quarter and full fiscal year, citing macroeconomic uncertainty and foreign exchange headwinds.5