As of the end of March, S&P 500 companies were forecast to report earnings growth of 9.1 percent during first quarter earnings season, which kicks off this week. But companies often beat expectations, so the actual earnings growth may be higher.
Over the last five years, 68 percent of companies, on average, have beaten analyst forecasts, adding 2.9 percent on top of expectations, according to FactSet. That would mean the first quarter earnings growth rate could be more like 12 percent, which would be the the best since 2011.
Much of the gain in earnings can be chalked up to the energy sector, which is turning profitable again as oil prices have stabilized. In addition, financials are forecast to have grown earnings by 14.5 percent in the first three months of the year, with bank earnings up 10 percent, according to FactSet.