Earnings Report Card: Peak Profitability Meets Peak Uncertainty

Earnings season is a tale of two markets right now.

And depending on which side of the ledger you’re watching, you can make a convincing case for either direction.

The bulls have something major working in their favor…

S&P 500 Index profit margins are at all-time highs, with both the 12-month forward and trailing lines pushing into territory the index has never seen before.

Companies are generating more earnings per dollar of sales than at any point in modern market history — a structural story built on leaner post-pandemic operations and early AI-driven productivity gains.

That’s not noise. It’s a genuine shift in how American business runs.

But here’s the thing about record margins: they’re also a ceiling waiting to happen. Tariff pressure is still weighing on supply chains.

Consumer spending is softening at the edges. And when you’re already operating at peak efficiency, there’s not a lot of fat left to cut when revenue starts to disappoint.

So which story wins?

That’s exactly what this earnings season is going to tell us.

The margin picture looks great on paper — but the next 60 days will show whether companies can actually defend these numbers in a world that got a lot more complicated in a hurry.

Speaking of earnings… let’s jump into some “bullish” earnings projections for next week…

“Bullish” Earnings to Watch

These stocks are expected to beat their earnings per share (EPS) from the previous quarter. And if those expectations are met or exceeded, they could potentially trade higher.

For this screen, stocks must meet four criteria:

10 or more analysts cover the stock.
The average analyst recommendation is a “Buy.”
It BEAT analysts’ EPS estimates for the previous quarter.
The average analyst estimate for the current quarter’s EPS is greater than the previous one.

Here are 10 companies that made this week’s list:

The one that stands out to me is Diamondback Energy Inc. (FANG).

Diamondback specializes in acquiring, developing and exploring onshore oil reserves in the Permian Basin of West Texas.

Needless to say, with oil prices spiking to more than $100 a barrel, earnings for a company like Diamondback will certainly benefit.

In fact, I would go out on a limb to suggest that Diamondback will not just meet Wall Street’s expectations, but beat them.

If that does happen, expect a change in its “Neutral” rating on Adam’s Green Zone Power Ratings system.

Now, let’s look at potentially “bearish” earnings for next week…

“Bearish” Earnings to Watch

For our “bearish” earnings screen, we’re only looking for two things:

10 or more analysts must cover the stock.
The average analyst estimate for the current quarter’s EPS is less than the previous quarter’s.

We want companies that are covered by a sufficiently large group of Wall Street analysts who collectively expect the company to report a quarter-over-quarter decline in earnings.

Here are 10 companies that passed this screen:

On the other side of the oil and gas coin is Marathon Petroleum Corp. (MPC).

Marathon is an oil refiner and marketing company, whereas Diamondback is an upstream oil and gas producer.

The projected earnings downturn at MPC is predicated on tighter crack spreads (the difference between crude oil and refined product prices). When the crack spread widens, profits for companies like Marathon increase.

However, despite the projected decline, it’s important to remember that Marathon has actually beaten Wall Street expectations for both EPS and sales in four of the last five quarters.

No question, Marathon’s EPS will decline quarter over quarter, but something tells me the company will beat expectations.

That may soften the blow that the quarterly decline will have on its Green Zone Power rating.

Should be another fun week of earnings.

Until next time…

Safe trading,