Back on September 30, Q1 2015 earnings were expected to grow by 10% from a year earlier. A few short months later, Q1 EPS (non-GAAP of course) growth was revised to 4%. It currently stands at -2.8%, a number which as we reported a month ago, is the biggest annual drop since 2012. What is the reason for this collapse in EPS?

There are two.

First, plunging crude prices, which after rebounding from the low $40s, have since posted a modest dead cat bounce to the upper-$40s, but are nowhere near enough to allow quarterly EPS growth to resume its historic pattern of growing in the high single, low double digits. The devastation that has resulted in the Capex of the shale sector including the already ramping up layoffs of energy workers, extensively documented here, needs no further commentary.

Second, the surging dollar has led to a drubbing for corporate profitability, and one needs merely to glance at some of the earnings call transcripts of the multinationals to realize just how much of an impact the strong USD has become.