The third-quarter 2025 earnings season is about to kick off. This week’s quarterly reports from Pepsi PEP, Delta Airlines DAL, and two other S&P 500 members for their respective fiscal quarters ending in August will be considered as part of the September-quarter tally.
We have already seen such fiscal August-quarter results from 19 S&P 500 members, including results from FedEx, General Mills, Oracle and others. Key banking earnings that are considered one of the inaugurators should start the season from mid-October.
Inside the Q3 Growth Projections
The projection for Q3 earnings is to increase by 5.5% from the same period last year, on 6.1% higher revenues. This would follow earnings growth rates of 12.6% and 12.4% in Q2 and Q1 2025, respectively, per the Earnings Trends issued on Oct. 2, 2025.
The overall picture ahead of this reporting cycle is one of continued resilience and a steadily improving outlook. Unlike other recent periods, the revision trend has been positive, with estimates for Q3 modestly up since the quarter got underway.
With respect to growth, Q3 earnings are expected to be above the year-earlier level for six of the 16 Zacks sectors. For the whole calendar year, total S&P 500 earnings are expected to grow by 9.5% in 2025. A total of nine sectors is expected to deliver positive earnings growth in 2025.
Below, we highlight a few sector-based exchange-traded funds (ETFs) that are likely to gain or lose in light of Q3 earnings growth projections.
Sector ETFs to Win
Aerospace – iShares U.S. Aerospace & Defense ETF ITA
Q3 earnings growth is expected to be 248.9% on 10.1% higher revenues. The sector’s Q2 2025 earnings growth was 26.6% on 11.7% higher revenues.
Technology – Technology Select Sector SPDR ETF XLK
The sector is expected to witness 12% earnings growth on 12.7% revenue growth in Q3. This expected growth should follow Q2 earnings growth of 21.8% and revenue growth of 14.3%.
Finance – Financial Select Sector SPDR ETF XLF
Q3 earnings growth is expected to be 10.1% followed by a 14.2% earnings expansion in Q2. The sector’s Q3 2025 revenue growth is 5.8% on 4% revenue growth in Q2.
Sector ETFs to Lose
Auto – First Trust S-Network Future Vehicles & Technology ETF CARZ
The sector is expected to lose 31.8% earnings stemming from 4.9% lower revenues. The sector’s earnings loss of 23.3% in Q2 of 2025 was due to 2.1% revenue loss.
Construction – Invesco Building & Construction ETF PKB
Q3 earnings loss is expected to be 13.7% despite 1.0% higher revenues. The sector’s Q2 2025 revenue retraction was 10.1% on 0.8% lower revenues.
Transportation – iShares U.S. Transportation ETF IYT
The sector is expected to lose 7.7% earnings due to 0.3% revenue weakness. This expected loss will follow Q2 earnings loss of 4.4% and revenue decline of 0.4%.
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Delta Air Lines, Inc. (DAL): Free Stock Analysis Report PepsiCo, Inc. (PEP): Free Stock Analysis Report Financial Select Sector SPDR ETF (XLF): ETF Research Reports Technology Select Sector SPDR ETF (XLK): ETF Research Reports iShares U.S. Transportation ETF (IYT): ETF Research Reports Invesco Building & Construction ETF (PKB): ETF Research Reports First Trust S-Network Future Vehicles & Technology ETF (CARZ): ETF Research Reports iShares U.S. Aerospace & Defense ETF (ITA): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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