Earnings Outlook: Energy sees downward estimate revisions

BOSTON (Reuters.com) -- At this time, the estimated growth rate for the third quarter of 2008 stands at -1.7%. On April 1st, the estimated growth rate for the third quarter was 17.3%.

The decline in the third quarter growth rate during the past week (to -1.7% from -0.3%) can be attributed in part to downward estimate revisions in the Energy and Financials sectors.

The growth rate for the Energy sector dropped to 57% from 59% during the past week. Companies in the sector that recorded downward estimate revisions over this timeframe include Chevron, ConocoPhillips and ExxonMobil. The growth rate for the Financials sector dropped to -59% from -55% during the past week. Companies in the sector that recorded downward estimate revisions over this timeframe include American International Group (AIG), Merrill Lynch and XL Capital. Since the start of the quarter, most of the decrease in the third quarter growth rate (to -1.7% from 12.6%) can be attributed to downward estimate revisions in the Financials sector. At the industry level, the aggregated net income for companies in the Diversified Financials (-$3.8 billion), Investment Bank & Brokerage (-$7.3 billion) and Multi-line Insurance (-$4.7 billion) industries has decreased by $15.8 billion since the beginning of the quarter.

(John Butters is director, U.S. earnings for Thomson Reuters Proprietary Research Group. For more on the earnings outlook for the quarter - and a break down by sector, click here )