The fourth quarter 2014 earnings season has not resulted in the dancing in the streets we have seen over the last few quarterly earnings in U.S. markets. While it has certainly not been disastrous, there have been a number of notable misses and a general weakness in the numbers. In fact, according to John Butters, Senior Earnings Analyst at FactSet Insight, analysts are now projecting a year over year decline for first quarter 2015 S&P 500 earnings.

All about Apple

earningsinsight1-30a Apple

Butters notes that over the past week, “the blended earnings growth rate for the S&P 500 for Q4 2014 increased to 2.1% today from 0.2% last Friday. The dollar-level earnings for the index rose by $5.0 billion over this period (to $273.8 billion today from $268.8 billion last Friday).”

In terms of sectors, the information technology sector witnessed the largest increase in dollar-level earnings of all sectors over the past week, as earnings for the IT sector were up by a robust $3.1 billion. At the company level within the sector, Apple was the largest contributor not only to the boost in dollar-level earnings for the sector, but for the move up in the S&P 500 as a whole.

Late last month, Apple reported blowout earnings per share of $3.06 for fourth quarter 2014, almost 17.5% higher than the mean analyst estimate of $2.60. Given the firm’s weight in the index, the iPhone maker represented more than 2.5 billion of the $5.0 billion increase in earnings for the S&P 500 index over the past week.

Butters points out that if “Apple had reported actual EPS that matched the mean EPS estimate, the blended earnings growth today would be 1.1% rather than 2.1%.”

He also highlights that Apple is now the biggest contributor to earnings growth for the S&P 500 at the company level for the fourth quarter. Ex-Apple, the blended earnings growth rate for the S&P 500 for fourth quarter 2014 would slump from 2.1% all the way to 0.3%.

Y-O-Y EPS decline in Q1 2015 for S&P 500

Butters also points out that this week was a sea change in the analyst consensus for year-over-year earnings  growth in first quarter 2015 to a year-over-year decline in earnings. However, expectations for earnings growth for the first quarter of the year have been dropping for some time. Back on September 30, the projected EPS growth rate for Q1 2015 was 9.9%. By the end of the year, the anticipated EPS growth rate had dropped to 4.2%. As of February 2nd, the estimate stands at -1.6%.

Of note, the majority of the drop off in the estimated earnings growth rate for the S&P 500 for first quarter 2015 is related to lower earnings estimates for companies in the energy sector. As of September 30th last year, the projected earnings growth rate for the energy sector for first quarter 2015 was 3.3%. As of December 31st, the estimated growth rate had slumped to to -28.9%. It currently stands at -53.8%.