Earnings season poised to...disappoint

First quarter earnings season kicks off in earnest this week and everything from the strong dollar to the low price of oil and turmoil abroad is sure to have had an impact. Christine Short of Estimize says these headwinds could make for a rough set of reports. Her firm is looking for -1.1% growth on the S&P 500 and -1% in revenues. If those estimates became reality it would be the worst earnings season in more than five years.

“You’re going to see almost every company mention the stronger dollar. We’ve only had 18 companies report up to this point, but almost everyone from Adobe (ADBE) to Nike (NKE) to Oracle (ORCL) – everyone’s mentioning the stronger dollar,” Short says.

While the dollar was strengthening last quarter lower gas prices and higher consumer spending masked many of the issues that accompany a more dominant U.S currency.

Get the Latest Market Data and News with the Yahoo Finance App

“It’s getting harder to offset,” Short notes. “Now, we still have consumer discretionary and industrials as two of the winners for this quarter, but with energy down 59% it’s dragging down the overall index.”

Adding insult to injury, according to Short, is a series of mixed economic reports that could be a further drag on earnings. Here is what Short had to say on that front:

Our latest reading on consumer sentiment was a little lower. Consumer confidence, however, another indicator was high. Retail sales we saw in the latest reading were down, however, some of the housing indicators have been very good, so it depends on what pocket you’re looking at. Some of the larger ticket items which were slow for a while, we’re starting to see autos and housing pick up in some of the readings and we’ve already accounted for the first quarter so you’re not going to see the latest data necessarily reflected there, but going forward some of these indicators are going to have to get a bit stronger, especially on the consumer front.

Add to that a jobs number last Friday that, at the very least, gives consumers and economists pause until next month, it all creates a messy situation that could impact Q1 earnings and future guidance to boot.

More from Yahoo Finance
Ford CEO Mark Fields: China and India are key to growth
KIND CEO: How we became the fastest growing nutrition bar in America
UniQure soars on Bristol-Myers deal; Qualcomm slides