Analyzing the Evolving Earnings Picture: What Should Investors Know?

By Sheraz Mian | February 11, 2026, 7:29 PM

Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>

Here are the key points:

Total earnings for the 335 S&P 500 members that have reported Q4 results are up +12.9% from the same period last year on +8.9% higher revenues, with 76.4% beating EPS estimates and 71.9% beating revenue estimates.

Earnings estimates for 2026 Q1 have modestly increased since the quarter got underway, with positive estimate revisions for the Tech, Finance, Utilities, Business Services, and Industrial Products sectors offsetting negative estimate revisions for 10 of the 16 Zacks sectors over that time period. Had it not been for the positive estimate revisions for the Tech sector, Q1 estimates for the index as a whole would be modestly down since the quarter got underway.

On the negative side, 2026 Q1 estimates are going down for 10 of the 16 Zacks sectors, with significant negative revisions pressure at the Energy, Medical, Consumer Discretionary, and Construction sectors.

The aggregate revisions trend for 2026 is positive, as had consistently been the case in 2025 as well. Since the start of 2025 Q4, rising estimates for the Tech, Finance, and six other sectors (Autos, Retail, Transportation, Construction, Industrials, and Business Services) have more than offset negative estimate revisions at the remaining 8 Zacks sectors.

Sectors suffering significant negative estimate revisions since the start of 2025 Q4 include Energy, Basic Materials, Conglomerates, Aerospace, and others. Had it not been for the Tech sector’s positive estimate revisions, the aggregate revisions trend would have been modestly negative since the start of 2025 Q4.

The Evolving Tech Sector Earnings Picture

Regular readers are well aware of the Tech sector’s critical role in the aggregate earnings growth picture. In fact, the sector has been a key driver of aggregate earnings growth since the second quarter of 2023. This followed a roughly six-quarter period starting in 2022 Q1, when the sector had become a growth drag. Not only has the Tech sector been producing impressive earnings growth, but the sector has also been consistently enjoying a favorable estimates revision trend for some time now.

The Tech sector’s strong earnings profile has provided the fundamental underpinning for the group’s positive stock market momentum. But not all Tech stocks have been thriving lately; software stocks, in particular, have struggled.

A case in point is the recent Gartner IT quarterly release, in which it beat EPS and revenue estimates but provided subpar guidance. Artificial intelligence-centric disruption and disintermediation worries had already been weighing on Gartner shares, and the company’s weak guidance added to those worries. This is the third quarter in a row that Gartner has disappointed the market with its earnings results, which is on full display in the stock’s -69% decline in the trailing 12-month period.

Gartner isn’t technically a software player like Adobe ADBE but rather a provider of information technology consulting services, like Accenture ACN. While market participants see downside risks to both the legacy software and IT consulting business models, sentiment is particularly negative on the latter.

You can see this in the stock market performance of these stocks, as we show in the chart below that illustrates the one-year performance of Gartner, Accenture, and Adobe relative to the Zacks Tech sector and the S&P 500 index.