Wall Street strategists and industry analysts now expect first-quarter earnings at Standard & Poor's 500 companies to decline 5.5 percent from a year earlier, twice the 2.7 percent decline they had forecast just one week ago, according to Reuters Estimates.
The forecast reflects the deepening of the global credit crunch, which has worsened the outlook for many companies, especially in the financial sector.
The Federal Reserve slashed interest rates again this month and announced several steps to make it easier for financial services firms to borrow, and stem the credit crisis.
Strategists and analysts said financial services companies may suffer a 40 percent decline in first-quarter earnings, while consumer cyclical companies may see earnings fall 10 percent, according to Reuters Estimates.
In contrast, energy and technology companies may see earnings rise 29 percent and 12 percent, respectively, it said.
The outlook for the second quarter has also worsened.
Analysts on average expect year-over-year earnings at S&P 500 companies to fall 0.9 percent, after having forecast a 0.2 percent gain a week earlier.
Among the 826 publicly traded companies to offer in March their outlooks for future results, 142 issued positive outlooks, 201 issued negative outlooks, and 483 issued neutral outlooks, Reuters Estimates said.