Companies in the S&P 500 (^GSPC) have reported what's broadly been considered a solid Q1 earnings season for the index, with one key exception: drugmaker Bristol-Meyers Squibb (BMY).

Last month, the company reported a massive loss per share in the first quarter on charges related to a series of acquisitions and cut its profit forecast for the year.

With 92% of S&P companies done reporting, the index is pacing for 5.4% earnings growth compared to year ago quarter, which would be the largest year-over-year earnings growth for the index since the second quarter of 2022. Take out Bristol, and the pace jumps to 8.3%, according to FactSet senior earnings analyst John Butters.

Overall, the Health Care sector (XLV) has seen earnings decline by 25.4% from the same quarter a year ago, in line with Energy's (XLE) decline for the worst performance in the S&P 500 this quarter.

When removing a few other companies from the sector, the S&P 500's earnings growth would shoot even higher. Butters also ran the numbers for the index when excluding Pfizer (PFE) and Gilead Sciences (GILD). Gilead Sciences reported a loss per share of $1.32 in the most recent quarter, compared to earnings per share of $1.37 in the same quarter a year ago. Pfizer meanwhile reported earnings per share of $0.82, down from $1.23 in the same quarter a year ago.

When removing those two companies and Bristol-Meyers Squibb, the S&P 500 would be pacing for earnings growth of 9.7%, per Butters analysis.

Interestingly, the declining earnings hasn't weighed on the overall sector performance in the last month. The Health Care sector has been up a modest 1.4% in the past month, the fourth-best performance of any sector and better than the S&P 500's 1.2% return during the time period.

This comes as the earnings declines aren't expected to continue in the sector. After Bristol Meyers Squibb reported its massive loss attributed to its acquisition of Karuna Therapeutics, analysts expect the company to bounce back in the second quarter with earnings per share of $1.69, down from $1.75 in the year-earlier period.

Earnings in the sector overall are expected to rebound in the second quarter, too. Data from FactSet shows Health Care is expected to produce the second-highest year-over-year growth of any sector in the second quarter, with Wall Street consensus projecting 17.2%

FundStrat's head of research Tom Lee wrote in a note to clients on May 10 that rebounds currently expected in Health Care, Energy and Materials (XLB) are "a tailwind for stocks."

Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.

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