The big concern for earnings this quarter is not U.S. dollar's strength, but the impact of low oil prices, Earnings Scout CEO Nick Raich told CNBC on Wednesday.
"It's going to be quite devastating for profits and expectations for profits for the energy companies for 2015 and into 2016," he said in a "Squawk Box" interview.
That is a problem because every dollar drop in energy sector earnings expectations is not being met with an equal rise in the nine other S&P sectors, he said. Consequently, energy earnings are dragging down overall S&P earnings.
Raich noted that the 10 worst earnings revisions in the S&P 500 come from energy companies. Further, he added, the declines in energy are the most severe the market has seen in any sector since the financial crisis. That magnitude is what will produce the devastating impact.
On Tuesday, heavy equipment maker Caterpillar, which makes engines that generate power for oil and gas exploration, singled out falling crude prices and foreign exchange for its earnings miss and disappointing outlook.
Also this week, blue chip companies such as DuPont, Procter & Gamble and Microsoft said a strengthening U.S. dollar hurt earnings. A strong dollar makes U.S. products more expensive abroad and dilutes the value of profits when American companies bring cash back home.
Raich said the currency headwinds tend to be overhyped and do not have as great an impact as many suggest because most companies hedge.