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

The Q3 earnings season has started already, with results from 9 S&P members out at this stage. Total earnings for these 9 index members, which includes operators like Oracle (ORCL - Analyst Report) , FedEx (FDX - Analyst Report) ,Adobe Systems (ADBE - Analyst Report) and others, are up +2.2% from the same period last year on +8% higher revenues, with 66.7% coming ahead of EPS estimates and 55.6% beating revenue expectations.

All of these companies that have reported results already are reporting results for their fiscal quarters ending in August, which get counted as part of our Q3 tally. In all, we will have seen results from 25 S&P 500 members by the time Alcoa (AA - Analyst Report) comes out with quarterly results on October 10th.

But as you can see in the chart below of weekly earnings calendar for S&P 500 members, we wouldn’t get into the heart of the Q3 earnings season till the middle of next month.

Estimates for Q3 have come down, following a well-established historical trend. Total Q3 earnings for the S&P 500 index are currently expected to be down -3.1% from the same period last year on +1% higher revenues. The chart below shows estimates for Q3 have evolved since the start of the quarter.

As negative as this revisions trend looks, it is nevertheless an improvement over what we have become used to seeing in the recent past. In other words, estimates for Q3 have not fallen by as much as was the case at the comparable stages in other recent reporting cycles. Estimates for 13 out of the 16 Zacks sectors have come down since the beginning of July, but they have come down the most for the Auto sector and the least for the Industrial Products sector.

Estimates Beyond Q3

The chart below shows Q3 growth expectations contrasted with what was actually achieved in the preceding four quarters and estimates for the following three periods. Full-year 2016 earnings growth expectations are now negative, similar to what we saw last year.

Beyond the current period (September quarter), meaningful growth is expected to resume from Q4, which is then expected to continue into 2017.

Easier comparisons for the Energy sector arrive in Q4, when the sector’s earnings growth turns positive. But the expected growth in Q4 and beyond isn’t solely a function of easy comparisons for the Energy sector – the expectation is for positive momentum from a broad cross section of sectors. Those expectations will most likely need to come down, but it will be interesting to see to what extent they will have to come down.