We’re another week into the fourth quarter earnings reporting season, and it looks like Wall Street is really unsure about what’s going to happen. Analysts are expecting a second consecutive quarterly year over year earnings decline, and at this point, there’s little doubt that this will happen. The big question is just how bad the decline will be. 

4Q earnings decline estimated at around 6%

S&P Capital IQ Senior Analyst Lindsey Bell said in the Friday edition of her earnings update that on average, analysts are expecting a 5.81% decline in earnings for the S&P 500, which would bring them to $28.78 per share. Over the last week or so, the percentage of decline has been bouncing around but staying close to the 6% area:

As more and more companies in the S&P 500 release the earnings results from their December quarters, it’s understandable that the percentage is changing rapidly. However, what’s different this time is that there’s a decent amount of fluctuation in both directions. In the third quarter, estimates for the decline trended rather steadily upward. At the end of the quarter, the decline didn’t end up being nearly as bad as what analysts were forecasting at the beginning of October.

Now to be fair, we’re only a couple of weeks into the fourth quarter reporting season, and most of the S&P 500 has yet to report. This coming week, 134 companies are scheduled to release their reports, so by Friday, we could see a trend emerge, especially as heavyweights Apple (AAPL) and Microsoft (MSFT) report.

Just four sectors to see earnings growth

As has been expected for some time, only four of the S&P 500’s ten sectors are expecting to see earnings growth for the fourth quarter with the Telecommunication Services sector leading the way.

In the third quarter, only three sectors saw a decline, with the Energy sector being the biggest drag. And it appears as if things have only gone from bad to worse for the sector, as we’re seeing a clear downward trend in estimates. Just over the last week, the estimate for Energy’s decline has fallen from -70.39% to -72.47, and the first quarter is also expected to be brutal for Energy.