Analysts believe that the series of consecutive quarterly declines in the combined earnings and revenue of S&P 500 companies would continue in the fourth quarter and full-year 2015.
According to FactSet, analysts based their conviction based on the combined 1.8% earnings decline and 4% revenue decline of S&P 500 companies for the third quarter.
The earnings and revenue declines were based on the results of companies that already reported and estimated results for companies yet to report. Currently, more than 90% of the S&P 500 companies already reported actual results for the third quarter.
According to analysts, it is highly likely for the S&P 500 to report earnings and revenue declines year-over-year for the period. It would mark the second consecutive quarter of earnings declines and third consecutive quarter of revenue declines for the index.
Estimated 4Q, CY2015 earnings and revenue declines for S&P 500
Analysts estimated that the fourth-quarter earnings and revenue of S&P 500 companies would decline by 3.6% and 3.1%, respectively.
It would be the first time for the S&P 500 to record three consecutive quarter of year-over-year decline since the Q1 to Q3 of 2009, if it would suffer earnings decline for the fourth quarter.
It would also be the first time for the index to record four consecutive quarters of year-over-year revenue declines since Q4 2008 to Q3 2009 if it would post a revenue decline in the fourth quarter.
For the current year 2015, analysts estimated that the S&P 500 would post a 3% decline in earnings and a 3.4% decline in revenue. It would be the first time for the index to report the year-over-year decline in earnings and revenue on an annual basis since 2009.
The index recorded an 8% earnings decline and 7.7% revenue decline in 2009.
Energy sector expected to be the largest contributor to the declines
According to FactSet, analysts expected the energy sector to be the largest contributor to the estimated earnings and revenue declines of the S&P 500 in the fourth quarter and full year 2015.
Based on their estimate, the energy sector will suffer a 64.3% decline in earnings and 34.2% decline in revenue for the fourth quarter.
The energy sector is expected to record a 58.5% decline in earnings and 34.4% decline in revenue for the full year 2015.
Excluding the performance of the energy sector, S&P 500 is estimated to achieve a 1.6% growth in earnings and 1.2% revenue growth for the fourth quarter. The index is expected to post a 6.9% earnings growth and 1.9% revenue growth for the full year 2015.