Corporate Profits Could Recover Later this Year: Pros

Fourth-quarter earnings are down sharply, but there may be a few bright spots ahead.

“There are only two sectors where we’re looking for positive growth right now, and that’s healthcare and consumer staples,” said Ashwani Kaul, director of research at Thomson Reuters. “The rest of the sectors in the S&P are sharply negative.”

Thomson Reuters estimates S&P 500 earnings to be down 39.2 percent for the fourth quarter.

“If we do see an earnings recovery, we’re looking at the latter part of 2009,” added Kaul. “The third quarter (and) the fourth quarter look positive right now, but those are obviously subject to change based on market conditions.”

Sam Stovall, chief investment strategist at Standard & Poor’s, has a similar outlook for 2009.

“We’re thinking that possibly the second half could actually start to see a bit of a recovery," he told CNBC.

Before a recovery, however, Stovall expects some choppy waters in the near term.

“First quarter we’re still expecting to see about seven of the 10 sectors in negative territory,” he said. “We think 32 of the industries in the S&P will post either a zero earnings or a negative earnings, and only 15 industries are expected to show an increase in earnings, so it’s still a very tough quarter.”