November 6, 2026
By Christopher Combs
Chief Investment Officer
Silicon Valley Capital Partners
With 88% of S&P 500 companies having reported third-quarter earnings, corporate America continues to demonstrate impressive earnings and revenue growth. According to FactSet’s November 6 earnings update, the results point to three important takeaways for investors.
1-Corporate Earnings Growth Remains Exceptionally Strong
The S&P 500 is reporting 31.4% year-over-year earnings growth for the third quarter, up from 29.1% at the end of September.
If sustained, this would mark the third consecutive quarter of earnings growth exceeding 25% and the eighth consecutive quarter of double-digit growth.
Importantly, all 11 S&P 500 sectors are reporting positive earnings growth, with Energy, Information Technology, and Materials leading the way.
Takeaway: The earnings expansion is broadening across the economy. Strong corporate profitability is not limited to a handful of technology companies, providing a more diversified foundation for equity markets.
2-Revenue Growth Confirms Underlying Business Strength
S&P 500 companies are reporting 14.3% year-over-year revenue growth, compared with expectations of 12.2% at the end of September.
Additionally, 74% of companies have exceeded revenue estimates, above the five-year average of 70%. Revenue surprises are averaging 2.1%, also above historical averages.
On the earnings side, 84% of companies have beaten EPS expectations, although the average earnings surprise of 2.7% remains below historical norms.
Takeaway: Strong revenue growth suggests that earnings expansion is supported by underlying business activity rather than simply cost reductions. However, smaller earnings surprises indicate that analyst expectations have become more demanding.
3-Strong Earnings and Lower Valuations Create a Constructive Market Backdrop
Analysts now project 28.4% earnings growth for Q4 2026 and 33.3% earnings growth for calendar year 2026.
Despite these impressive growth expectations, the S&P 500’s forward 12-month price-to-earnings ratio has declined to 17.7 times earnings, below both its five-year average of 19.8 and 10-year average of 19.1.
This compares with a forward P/E ratio of 19.0 at the end of September.
Takeaway: Earnings expectations remain strong even as market valuations have moderated. This creates a potentially favorable environment in which future equity returns can be driven by earnings growth rather than dependence on expanding valuation multiples.
Final Perspective
The most important message from the third-quarter earnings season is that corporate fundamentals remain strong despite market volatility and elevated investor expectations.
With earnings growing more than 30%, revenues advancing at a double-digit pace, and forward valuations below historical averages, the underlying earnings picture remains constructive.
For investors, the key distinction is between short-term market price movements and the longer-term trajectory of corporate earnings. While valuation, interest rates, and economic risks remain important, sustained earnings growth provides a fundamental foundation for equity markets.