Expectations were lofty. Headed into reporting season in the US, consensus anticipated aggregate S&P 500 EPS growth of 12%.

That counted among the highest pre-season YoY profit growth hurdles since 2021.

Of course, this is a rigged game. Not in any illegal sense. But it’s in everyone’s interests for companies to beat estimates. And an important input into company analysts’ estimates is corporate guidance.

So… well, it’s easier to think about this in terms of misses. Looking back a quarter century, the average frequency of one standard deviation or greater downside earnings surprises is less than 15%.

Suffice to say you have to try pretty hard — or something has to go very wrong — for you to screw this up too terribly bad if you’re the C-Suite. But even in that context, the current reporting season stands out.

As the bottom pane in the figure above shows, just 5% of companies have missed by a standard deviation or more so far, with nearly three-quarters of S&P results on the books.

That, Goldman’s Ben Snider remarked, “is the smallest share in over 25 years of data history outside of the 2021 COVID reopening period.”

There are some caveats. By and large, consumer companies haven’t reported yet and as Snider noted, that matters right now. Retailers “have been a particular recent investor focus as a result of surging energy prices,” he wrote. And Nvidia won’t report for another three weeks.

Those aren’t the only reasons it’d be a mistake to take the current, mid-season EPS growth rate of 25% (!) at face value. As the figure on the right, below, shows, more than a third of hyper-scaler net income was attributable to “other income,” which here mostly means large Anthropic stakes owned by Alphabet and Amazon.

Still, as the figure on the left shows, aggregate index earnings are tracking 4ppt ahead of the (high) pre-season bar even without those Anthropic write-ups.

Note that there are several different angles you could take while writing an article like this one. If I were less scrupulous, I might’ve focused solely on that Anthropic point and chosen a title like, say, “S&P 500 Earnings ‘Beat’ Is Actually Just Anthropic Paper Gain.” Or, “S&P Earnings ‘Beat’ Isn’t What It Seems.” And so on. I went with something a little more subtle.

But the bottom line, no EPS pun intended, is that even if you strip away all the caveats and look at earnings growth for the median S&P 500 stock, that figure is 11%, the best in years and 3ppt ahead of the pre-season consensus.