“83% of S&P 500 companies beat EPS estimates in Q2 2025” https://www.factset.com/earningsinsight
But the real driver? A 15% USD slide from 109 to 96. That FX tailwind inflated overseas earnings, padded margins, and made weak quarters look strong.
Consensus EPS jumped from $62.49 to $65.67, a 5.1% gain https://roancp.com/sp-500-q2-2025-earnings-report-performance-and-expectations/
Strip out the currency boost, and the beat rate collapses.
Adjusted beat rate: 45–55%
Companies with >15% beat margins (Nvidia, Meta, Alphabet) still clear the bar. Those with <10% (UPS, Whirlpool, UnitedHealth) flip to miss.
Tech led the charge:
94% beat rate
7.8% average surprise
+7.2% relative return
“Blended EPS growth: +10.3% YoY” https://www.factset.com/earningsinsight
“Revenue beats: 79% of companies” https://www.factset.com/earningsinsight
But FX did the heavy lifting.
“EPS growth was estimated at 4.9% on June 30. Actuals came in at 10.3%” https://www.factset.com/earningsinsight
The dollar’s decline isn’t guaranteed to last. If it rebounds or stabilizes in Q3 and Q4, companies could face sharp earnings cuts. Investors might be blindsided by sudden downward revisions.
Analysts and media largely ignored the FX effect this season. Earnings calls and reports did not highlight currency risks clearly. That blind spot fuels the illusion of strength and leaves the market unprepared.
The illusion held. Until you factor in the dollar. Then it’s not “incredible.” It’s “inflated.”