The slide in commodities prices will weigh heavily on earnings in the energy and materials sectors, but the rest of corporate Australia is still ticking along at a steady pace.
Two sectors with heavy weightage on the index - energy & resources and financials are currently facing headwinds, analysts say, but other companies focused on the domestic economy are expected to show improved performance in their half year results.
"The difference between sectors is dramatic at the moment," CMC Markets chief analyst Ric Spooner said.
"Basically, we will see weakness in everything related to mining and energy. But we will see fairly steady growth in the other big sectors."
Australian resources companies have been battered by the continuing commodities downturn, which has seen oil prices slide below $US27 a barrel to a 13-year low, and iron ore prices hit a 10-year low below $US39 a tonne.
A slew of sector heavyweights, including BHP Billiton, Woodside Petroleum, Santos and Aurizon have flagged impairments in recent weeks, to reflect the impact of the lower price environment, but more one-off charges are expected.
Bell Direct analyst Julia Lee says if resources are included, the consensus estimate for December half earnings is to decline 6.0 per cent. Excluding resources, however, the estimate shifts to an increase of 5.1 per cent.
"There have been positive factors for other sectors. A weaker Australian dollar and lower oil prices are generally a good thing for businesses," she said.
"There have also been signs in recent months that the Australian economy is rebalancing from the resources sector."
Sectors expected to see improved returns include tourism, manufacturing and retail, and consumer staples.
Retailers have by-and-large reported strong sales over the key Christmas trading period and this could be reflected in earnings this month. Recent data has also signalled an improvement in Australia's manufacturing sector, the analysts said.
They hold out some hope even for the recently beaten-down banking and resources stocks.
While bad and doubtful debts are definitely on the rise, the latest RBA data suggests strong numbers for both the loan books and business credit, providing a slightly positive backdrop for banks earnings, Ms Lee said.
On the other hand, valuations in many of the mining and energy companies already reflects the writedowns and bottom prices, and an improvement in prices from these levels could change sentiment, Mr Spooner said.
"While headline numbers are impacted by these one-off charges, investors tend to focus on the underlying earnings or profitability of the company," he said.
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