Earnings season is upon us, and it may not look pretty, as year-over-year numbers are projected to decline.

A recent report from FactSet examines expectations for second quarter earnings as reporting season approaches. According to the report, year-over-year earnings and revenue for the S&P 500 (SPY) are expected to decline by 4.5% for the second quarter of 2015.

If that happens, it will mark the largest year-over-year decline in earnings since the second quarter of 2009, when earnings plunged 15.5% and revenue fell 11.5%. The last time index reported a year-over-year decrease in earnings was a 1.0% dip in the third quarter of 2012.

Companies with high amounts of global exposure are expected to be the hardest hit.

According to FactSet, companies that generate more than 50% of sales inside the United States are anticipated to have an earnings growth rate of 0.3%. Companies that generate the majority of their sales abroad, however, have an estimated earnings decline of 11.4%.

S&P 500 earnings vs sales

The picture is similarly disproportionate for sales. Firms that generate more than half of their sales in the U.S. have an estimated sales decline of 0.7%; those that generate more sales abroad have an estimated decrease of 12.6%.

The sector dragging S&P 500 earnings down most is energy, which is expected to be the largest contributor to year-over-year declines in both earnings and revenue due to steep declines in oil prices. A 60% earnings decline is expected for the sector, and a 40.5% drop in revenue.

The estimated earnings growth rate for the S&P excluding energy for the second quarter of 2015 is 2.1%, and the sales growth rate is 1.7%. Sans energy, it still appears that companies that sell more in the U.S. will fare better than those that have more business abroad.

Seven of the 10 sectors contemplated by FactSet are projected to report year-over-year growth in earnings, and health care is the strongest, with a 7.7% growth rate expected. Allergan is predicted to be the largest contributor to earnings growth, with earnings-per-share estimates for the second quarter at $4.39, compared to $3.42 a year ago.

Health care is also expected to have a high revenue growth rate of 6.9%.

While companies with high global exposure are expected to have taken hits on earnings and revenues in the second quarter, they weren’t punished by the market. In fact, quite the opposite.

S&P 500: U.S. and abroad sales comparison

For all of the companies listed in the S&P 500, the average price change from March 31 through June 25 was a 0.3% gain. Companies that generate more than 50% of sales inside the U.S. lost an average 0.4% during the period, while those that generate more than 50% of sales abroad gained 2.2%.

Of the companies that generate more than half of their sales outside of the U.S., Hasbro, Pall Corporation and Broadcom Corporation (BRCM) were the best market performers, returning more than 20%.

Analysts expect it to be a while before numbers bounce back. Earnings growth is not projected to return until the fourth quarter of 2015, and revenue growth is not anticipated until the first quarter of 2016.

Analysts currently predict an earnings decline of 1.0% in the third quarter of 2015, followed by 4.4% in the fourth quarter. Revenue is expected to fall by 2.5% in the third quarter and 0.3% in the fourth, followed by growth of 6.0% in the first quarter of 2016.

For all of 2015, analysts project earnings to grow by 1.6 and revenues to decline by 1.8%. Profit margins are expected to continue to expand throughout the year.

FactSet also notes that valuations appear to be a bit high.

The current 12-month forward P/E ratio of the S&P 500 index is 16.7, above its 10-year average of 14.1. Sector by sector, it is energy that has the highest ratio at 2.5, while financials and telecom services, at 13.3 and 13.4, respectively, have the lowest. Moreover, nine of the 10 sectors contemplated have forward 12-month P/E ratios that are above their 10-year averages, the only exception being telecom services.