This will be 'devastating' for earnings: Analyst

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.

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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.

However, Lou Brien, strategist at DRW Trading Group, told "Squawk Box" it's a rare company that hedges currency well. He noted that the euro has fallen about 20 percent against the dollar since May and 6 percent this year.

Still, with the stock market about 3 percent off its high, he said investors should not be too worried about the dollar's impact on earnings.

Instead, he is concerned about the lack of personal consumption and aggregate demand reflected in Tuesday's disappointing durable goods report.

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Orders for long-lasting goods such as appliances dropped 3.4 percent in December after a 2.1-percent fall the previous month, according to the Commerce Department.

"The corporations having trouble with overseas, I can understand that," he said. "Some of the ones are having trouble over here because the aggregate demand was better than it was, employment was higher than it was. The type of employment is not very good. Wages are not very good. So that growth rate is not particularly good."