Which S&P 500 Industries Are Reporting the Largest Year-Over-Year Earnings Declines in Q3?

For the third quarter, the S&P 500 is reporting a blended (combines actual results for companies that have reported and estimated results for companies that have yet to report) year-over-year decline in earnings of -16.5%. At the sector level, nine of the 11 sectors in the index are reporting a year-over-year decline in earnings, led by the Energy sector (-123.6%). Diving deeper to the industry level, how many industries in the index are reporting a year-over-year decline in earnings? Which industries are reporting the largest year-over-year percentage declines? Which industries are reporting the largest year-over-year dollar-level declines?

Overall, there are 63 industries in the S&P 500 index. Of these 63 industries, 44 (70%) are reporting (or are projected to report) a year-over-year decline in earnings for the third quarter and 19 (30%) are reporting (or are projected to report) year-over-year growth in earnings for the third quarter.

Of the 44 industries reporting (or projected to report) a year-over-year decline in earnings for the third quarter, the Airlines (-313%), Hotels, Restaurants, & Leisure (-133%), and Oil, Gas, & Consumable Fuels (-129%) industries are reporting the largest percentage year-over-year declines.

The Oil, Gas, & Consumable Fuels (-$16.3 billion), Airlines (-$13.3 billion), and Hotels, Restaurants & Leisure (-$9.7 billion) industries are also reporting the largest dollar-level declines in earnings at the industry level in Q3 2020 relative to Q3 2019. Combined, these three industries account for 67% of the net $58.3 billion year-over-year decline in earnings being reported by the entire index for Q3 2020 relative to Q3 2019.

It is interesting to note that all three of these industries are projected to report significant year-over-year improvements in dollar-level earnings in 2021 relative to 2020. Because of expected losses in 2020 for all three industries, year-over-year growth rates for 2021 can’t be calculated on a percentage basis. On a dollar-level basis, the Oil, Gas, & Consumable Fuels industry is projected to report a $26.9 billion year-over-year increase in earnings in 2021 relative to 2020. The Airlines industry is projected to report a $26.1 billion year-over-year increase in earnings in 2021 relative to 2020 (though the industry is still projected to report an overall loss in 2021). The Hotels, Restaurants, & Leisure industry is projected to report a $16.3 billion year-over-year increase in earnings in 2021 relative to 2020.

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