As the Q4 earnings season begins, analysts are forecasting a notable divergence between the Energy and Utilities sectors.
Energy Sector: 2nd Largest Year-Over-Year Earnings Decline of all 11 Sectors
With the Q4 earnings season kicking off this week, what are analysts expecting for earnings for Q4 for the Energy sector?
Overall, the Energy sector is expected to report the second-largest (year-over-year) earnings decline of all eleven sectors at -2.8%. Lower year-over-year oil prices are contributing to the year-over-year decrease in earnings for this sector, as the average price of oil in Q4 2025 ($59.14) was 16% below the average price for oil in Q4 2024 ($70.32).
At the sub-industry level, 3 of the 5 sub-industries in the sector are predicted to report a double-digit year-over-year decline in earnings: Oil & Gas Exploration & Production (-24%), Oil & Gas Equipment & Services (-14%), and Integrated Oil & Gas (-12%). On the other hand, two sub-industries are projected to report year-over-year growth in earnings. Both are expected to report growth above 10%: Oil & Gas Refining & Marketing (617%) and Oil & Gas Storage & Transportation (17%).
Looking ahead, analysts are predicting earnings growth for the sector starting in Q2 2026. For Q1 2026, analysts are expecting a year-over-year decline in earnings of -6.8%. Over the next 3 quarters (Q2 2026 to Q4 2026), analysts are projecting earnings growth rates of 6.6%, 1.4%, and 10.8%, respectively.
FactSet Energy Analyst Nathan Hasbrook provided commentary on key trends to watch for the Energy sector during this earnings season:
For U.S. producers, caution remains the prevailing sentiment as operators navigate ongoing uncertainty around near-term commodity prices.
Front-month WTI dipped to around $55/bbl in late-December and is projected to stay subdued through the first half of 2026. Despite this low-price environment, producers are expected to hold steady on production and capital expenditures this year. Global markets continue to wrestle with a crude surplus that exerts downward pressure on prices, offset somewhat by persistent geopolitical tensions, which have kept crude range-bound, between $55 - $60/bbl.
On the natural gas front, Henry Hub briefly surged above $5/MMBtu in early-December amid a cold snap sweeping across the country. Since then, prices have retreated, driven by milder weather and a lingering storage overhang. Looking ahead, operators are anticipated to sustain robust dry gas output to meet growing demand from power generation and LNG exports. The timing of demand growth and the pace of supply response will be key factors in determining market volatility this year.
FactSet Energy Analyst Katrina Abuls provided commentary on key trends to watch for LNG projects during this earnings season. View more of Katrina's commentary.
After a record year in 2025 for the US LNG Industry, in which six projects achieved Final Investment Decision (FID), the focus this earnings cycle will shift to whether companies are continuing to make financing progress on additional LNG expansion projects, such as Chenerie's Sabine Pass Stage 5 and Corpus Christi Stage IV, and NextDecade's Rio Grande Train 6. Additionally, attention should be paid to companies' expectations for global demand growth and international pricing, given that the global market is set to be well-supplied through the end of the decade, posing some downward risk for international pricing and thus US LNG cargoes. As for current projects, eyes will be on ExxonMobil for additional guidance on first LNG from its long-awaited Golden Pass LNG project, which is expected to provide some support for Henry Hub through 2026. Additionally, as Cheniere's Corpus Christi Stage III project continues to ramp up, Cheniere may provide further guidance on when the remaining three trains will be brought online in 2026.
Utilities Sector: 5th Highest Year-Over-Year Earnings Growth of all 11 Sectors
With the Q4 earnings season kicking off this week, what are analysts expecting for earnings for Q4 for the Utilities sector?
The Utilities sector is expected to report the fifth-highest (year-over-year) earnings growth rate of all eleven sectors at 4.6%. At the industry level,4 of the 5 industries in the sector are projected to report year-over-year earnings growth: Independent Power and Renewable Electricity Producers (61%), Gas Utilities (13%), Water Utilities (4%), and Electric Utilities (2%). On the other hand, the Multi-Utilities (-1%) industry is the only industry predicted to report a year-over-year decline in earnings.
At the company level, Vistra Corp. ($2.29 vs. $1.10) is expected to be the largest contributor to earnings growth for the sector. If this company were excluded, the estimated earnings growth rate for the Utilities sector would fall to 1.7% from 4.6%.
Looking ahead, analysts are predicting double-digit earnings growth for the sector for two of the next four quarters. Over the next four quarters (Q1 2026 to Q4 2026), analysts are projecting earnings growth rates of 8.3%, 11.4%, 6.5%, and 17.3%, respectively.
FactSet Senior Energy Analyst Trevor Fugita discussed key trends to watch related to the Utilities sector during this earnings season. View more of Trevor's commentary.
Large loads from data centers coming will continue to shape U.S. power markets in 2026. OpenAI’s 1.2 GW Stargate campus in Abilene, Texas, and Amazon’s 1 GW New Carlisle data center in Indiana are just two notable facilities driving new demand next year. Overall, data centers that have already come online contributed to a 2.5% increase in load from 2024 to 2025 in the United States. While this would typically support growth in natural gas-fired generation, these generators produced 2.7% less power year-over-year. Part of this decrease is attributable to renewable development, as through October 2025, 28.3 GW of solar had been added to the grid, resulting in a 31% increase in solar generation in 2025. Additionally, elevated Henry Hub natural gas prices (over a dollar higher in 2025 than in 2024) reduced gas-fired generation, with coal generation increasing by 11.8% to fill the gap. In the short term, higher gas prices and rapid renewable adoption may continue to limit natural gas generation growth. However, the continued emergence of large loads and 42 GW of scheduled coal retirements through 2028 provide significant upside for natural gas generation.
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