The financial sector seems to have struggled this quarter, bank analyst Paul Miller told CNBC on Wednesday, two days before Wells Fargo, Citigroup and JPMorgan report earnings.
Miller of FBR Capital Markets told "Squawk Box" that major banks have already experienced "tempered loan growth," in the wake of Wells Fargo's $185 million phony accounts settlement with regulators.
The Wells scandal has resulted in two heated hearings on Capitol Hill and CEO John Stumpf forfeiting about $41 million in unvested equity. Stumpf has agreed to forgo his salary while the board investigates the matter.
The banking industry has faced increased government scrutiny recently. "I just hope they're not on a witch hunt," Miller said.
Deutsche Bank has been talking with the Justice Department about settling investigations into mortgage-backed securities sales in the lead-up the 2008 financial crisis. The DOJ has said it wants the German lender to pay a $14 billion fine.
With headwinds like these facing the industry, Miller said, it's unlikely that any one bank will beat earnings expectations.
Estimize's Christine Short told "Squawk Box" that the energy sector also faltered this quarter. The category was supposed to see a big earnings comeback, but instead has seen a decline in profits.
Meanwhile, increasingly value-focused consumers are throwing a small wrench in overall earnings predictions, said Short.
After kicking off earnings season on a shaky note with Alcoa's disappointment and across-the-board downward revisions, predictions need to change on their own based on a shift in how consumers choose to spend their money, Short said.
"Consumer confidence is still OK," she said. "They're just being picky with how they allocate their income."
Short said fast food companies — a number of which have pushed to introduce fresh, wholesome ingredients to their menus — are doing particularly well among value-driven consumers.
Health care, consumer discretionary and technology were the best performers in the third quarter, Short said.