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

Earnings

By John Butters  |  October 26, 2020

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.

S&P 500 Q3 2020 Industry Earnings Declines Top 10

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.

S&P 500 Q3 2020 Industry Earnings Declines Top 10 Billions USD

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John Butters

Vice President, Senior Earnings Analyst, Investor Relations

Mr. John Butters is Vice President and Senior Earnings Analyst at FactSet. His weekly research report, “Earnings Insight,” provides analysis and commentary on trends in corporate earnings data for the S&P 500 including revisions to estimates, year-over-year growth, performance relative to expectations, and valuations. He is a widely used source for the media and has appeared on CNBC, Fox Business News, and the Business News Network. In addition, he has been cited by numerous print and online publications such as The Wall Street Journal, The Financial Times, The New York Times, MarketWatch, and Yahoo! Finance. Mr. Butters has over 15 years of experience in the financial services industry. Prior to FactSet in January 2011, he worked for more than 10 years at Thomson Reuters (Thomson Financial), most recently as Director of U.S. Earnings Research (2007-2010).

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