However, when FactSet removed the energy sector from the equation, S&P 500 ex-energy with over 50% U.S. sales could see earnings rise 5.9%, the index ex-energy could see a 3.1% earnings growth and S&P 500 companies ex-energy with over 50% sales outside the U.S. could see a 1.3% earnings decline.
Consequently, the wide disparity between the earnings forecast of the overall S&P 500 and the index ex-energy suggests that the energy sector will play a heavy negative role on the overall earnings season ahead. Additionally, with the forecast broken down between companies with large U.S. and overseas sales, the earnings projection indicates that the energy sector relies on a significant portion of overseas sales, which will be hampered by a strong U.S. dollar. [New Fracking Standards Could Weigh On Energy ETF Growth]
Energy Select Sector SPDR
For more information on the energy sector, visit our energy category.
Max Chen contributed to this article.