- Bank of America forecasts year-over-year earnings will be $34.00 in the first quarter, a 13% slump, according to a Monday note.
- The bank expects earnings per share to decline on a year-over-year basis in all four quarters of 2020, marking the first earnings recession since 2015-16.
- "We see even more downside risk to rest-of-year consensus estimates, where analysts forecast a -8% YoY decline in 2020 overall," BofA analyst Savita Subramanian said.
- Read more on Business Insider.
Bank of America sees first quarter 2020 earnings slipping amid the coronavirus pandemic, starting the first earnings-per-share recession in about three years.
The bank on Monday forecast that year-over-year earnings will be $34.00 in the first quarter, a 13% slump from the same period last year. Going forward, Bank of America expects earnings per share to decline on a year-over-year basis in all four quarters of 2020, marking the first earnings recession since 2015-16.
"With many analysts still adjusting numbers, we think bottom-up EPS may have further to fall," a group of Bank of America analysts led by Savita Subramanian wrote in a Monday note.
The bank's forecast comes just before the start of the 2020 earnings season, which will be kicked off by banks reporting this week. It's the first glimpse shareholders will get of how corporations have fared amid the coronavirus pandemic, which has all but halted the US economy and led most economists to forecast a recession this year.
Earnings estimates have plummeted since January as the coronavirus pandemic has hit the US hard. Since the start of the year through the beginning of April, bottom-up consensus estimates for first quarter earnings fell 10%, the biggest pre-season drop since the roughly 30% cut in the first quarter of 2009, according to the note.
Since the start of the month, estimates have fallen another 3% to $35.22, down 10% on the year. The bank forecasts that earnings per share will decline 29% for the full year.
"We see even more downside risk to rest-of-year consensus estimates, where analysts forecast a -8% YoY decline in 2020 overall," Subramanian said.
The energy and consumer discretionary sectors have seen the largest estimate cuts over the last three months, according to the bank. Real estate, utilities, and staples have had the smallest estimate cuts.
Despite the expectations for an earnings decline, the bank estimates that sales will grow 1% on the year. Still, that is the lowest rate of sales growth since the second quarter of 2016, according to the note.
Do you have a personal experience with the coronavirus you'd like to share? Or a tip on how your town or community is handling the pandemic? Please email covidtips@businessinsider.com and tell us your story.
Get the latest coronavirus business & economic impact analysis from Business Insider Intelligence on how COVID-19 is affecting industries.