With the June quarter reporting cycle now behind us, attention is shifting to the Q3 earnings season whose early reports will start arriving in the coming days. Estimates for Q3 followed the all-too-familiar trend of coming down as management teams provided weak guidance while reporting Q2 results.

Total earnings for the S&P 500 index are expected to be down -5.5% in Q3 from the same period last year on -5.1% lower revenues.

The chart below shows how earnings growth estimates for Q3 have evolved since the beginning of the quarter.

Energy remains the biggest drag in Q3, as has been the trend in recent quarters, with total Energy sector earnings expected to be down -63.5% on -36.5% lower revenues. Excluding this Energy sector drag, earnings growth for the remainder of the S&P 500 index would be up +1.6% on flat revenues.

Q2 Scorecard (as of September 4th, 2015)

The Q2 earnings season is (almost) over, with results from 499 S&P 500 members already out – Kroger (KR – Analyst Report) is the last index member to report Q2 results. As mentioned earlier, we will start tallying the Q3 earnings season in the coming days, with the FedEx (FDX – Analyst Report) and Lennar (LEN – Analyst Report) results on September 16th. FedEx and Lennar have fiscal quarters ending August, which get counted as part of our Q3 tally.

With respect to Q2, total earnings for these 499 companies are down -2.3% on -3.5% lower revenues, with 65.9% beating EPS estimates and 46.7% coming ahead of top-line expectations.

The chart below compares the growth rates and beat ratios for the 499 S&P 500 members that have reported results with other recent quarters.

We know that Energy has been a big drag on the aggregate growth picture. Excluding the Energy sector, total earnings for the S&P 500 index would be up +5.0% on +1.2% higher revenues. The charts below compare the Q2 growth picture, with and without the Energy sector.

As you can see above, the growth comparison would still be unfavorable when we look at the results thus far on an ex-Energy basis.