Earnings News: Your Weekly Update with Pennington Capital (September 15-22, 2025)

Welcome to the Earnings News section of Pennington Capital. This weekly update focuses on corporate earnings reports, guidance, surprises, and their market impacts, drawing from the ongoing Q3 2025 season. 

For the week ending September 22, 2025, S&P 500 earnings growth is forecasted at 7.7% year-over-year, with analysts raising estimates for 112 companies (56 positive, 56 negative), above historical averages of 43% positive.

The sector beat rate is 81% for Q2 (completed), but Q3 shows mixed signals, with Technology leading at 26% growth and Communication Services at 15%.

Key reports included FedEx (beat on cost-cutting), General Mills (missed due to category softness), and Lennar (weaker housing conditions), amid Fed cut optimism and tariff concerns.

Informed by trusted sources like FactSet, Yahoo Finance, and Earnings Whispers, this digest highlights top stories, trends, and implications. Whether you're analyzing Q3 guidance or positioning for beats, stay tuned for informed decisions.

1. Earnings Overview: Key Highlights for the Week

Q3 2025 earnings season progresses with 7 S&P 500 companies reporting this week, including Micron (MU), AutoZone (AZO), and Cintas (CTAS), amid upward revisions (10.7% CY 2025 growth forecast).

Positive guidance (53%) exceeds 5-year average (43%), but valuation at 22.6x forward P/E signals caution.

• Beat Rate: Q2's 81% beat (above 5-year 78%) sets high bar for Q3; Technology (26% growth) and Communication Services (15%) lead.

• Guidance: 56 positive vs. 56 negative EPS revisions for Q3, highest positive since Q3 2023.

• Sectors: Semiconductors (MU Q4 expected beat), Software (15% growth), Electronic Equipment (12%).

• Market Impact: S&P 500 +0.96% to 6,664.36, Nasdaq +2.15% on AI/earnings optimism.

Pro Tip: With 81% Q2 beats, focus on Technology ETFs like XLK for Q3 upside, but hedge with VIX calls amid tariff risks.

2. Key Earnings Reports: Beats, Misses, and Surprises

This week's reports showed mixed results, with FedEx beating on efficiencies and Lennar missing on housing woes.

• FedEx (FDX Q1 FY26, Reported Sept 19): EPS $5.50 vs. $5.23 expected (beat 5%), revenue $22.2B vs. $22.1B (beat 0.5%). Cost-cutting drove margins; stock +1.7% post-earnings.
  Guidance: FY26 EPS $18.00-$19.00, above $17.50 consensus.

• General Mills (GIS Q1 FY26, Reported Sept 18): EPS $0.74 vs. $0.75 expected (miss 1.3%), revenue $4.56B vs. $4.60B (miss 0.9%). Category softness and restructuring weighed; stock -2%.
  Guidance: FY26 EPS $4.45-$4.55, in line.

• Lennar (LEN Q3, Reported Sept 19): Weaker-than-expected results on housing conditions; revenue miss, stock -3%.
  Guidance: Cautious on affordability.

• Upcoming (Sept 23-26): Micron (MU Q4, expected beat on AI demand), Costco (COST Q4, potential miss on guidance), AutoZone (AZO Q4), Cintas (CTAS Q4).

Key Story: FedEx's 5% EPS beat and upbeat FY26 guidance ($18.00-$19.00) lifted logistics stocks, signaling resilience amid tariffs.

3. Sector Earnings Trends: Technology and Consumer Staples in Focus

Q3 guidance shows Technology (26% growth) and Communication Services (15%) leading, while Consumer Staples like General Mills face softness.

• Technology: MU Q4 expected beat on AI chips; 26% sector growth forecast.

• Semiconductors up 12%, Software 15%.

• Consumer Staples: GIS miss on category weakness; sector growth 0.1% excluding Tech/Health.

• Industrials: LEN miss on housing; tariff pauses hit steel (Outokumpu report).

• Overall Q3: 7.7% growth, 81% beat rate; positive guidance 53% (above 43% 5-year average).

Key Story: Technology's 26% Q3 growth, led by MU's expected beat, underscores AI momentum, but Staples' 0.1% signals consumer caution.

4. Earnings Implications: What It Means for Investors

• Technology/Communication: MU beat potential favors XLK ETF; 26% growth supports Nasdaq rally (+2.15%).

• Consumer Staples: GIS miss warrants caution on XLP; COST Q4 may underwhelm.

• Industrials/Housing: LEN weakness and tariffs hit XLI; diversify to domestic plays.

• Overall: 7.7% Q3 growth and 53% positive guidance signal resilience; favor Tech (60%), Staples (10%), bonds (30%) for balance.

Pro Tip: With 81% Q2 beats, buy MU pre-earnings for AI upside; hedge LEN weakness with VIX calls.

5. Next Week's Earnings Watchlist (September 23-29, 2025)

• September 23: No major S&P reports; watch Fed minutes for guidance impacts.

• September 24: Cintas (CTAS Q4, expected beat on uniforms demand).

• September 25: Micron (MU Q4, AI chip focus, beat potential).

• September 26: AutoZone (AZO Q4, auto parts strength).

• Ongoing: Costco (COST Q4, potential miss on guidance); monitor tariff effects on industrials.

Stay Updated: Bookmark this page for next week's update. Follow Earnings Whispers, FactSet, and Yahoo Finance for calendars and previews. Pennington Capital is your partner in earnings insights—empowering data-driven decisions.

Disclaimer: This update is for educational purposes only, not financial advice. Past performance does not guarantee future results. Consult a qualified financial professional for personalized guidance.