Watch the Financials This Earnings Season (C, FITB)

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Includes: C, FITB
by: Eddy Elfenbein

Eddy Elfenbein submits: Grab a seat. Earnings season is about to get started. This should be the 15th straight quarter of double-digit earnings growth for the S&P 500. But that’s overall earnings growth. Within industries, S&P projects uneven profit growth, with the following estimates: 53.7% growth in energy firms' Q4 profits, health care profits to climb 25.3%, tech earnings up 10.8%, financials growing 6.3%, and consumer staples falling 5%.

I think the critical area to watch will be the financials. The chart below shows that financials are only expected to grow by 6.3%. I’m curious how much the narrowed yield curve has impacted profitability. Analysts have been trimming estimates for stocks like Citigroup (C) and Fifth Third (FITB):

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