After a long holiday season, the U.S. markets are now geared up for the Q4 2014 earnings season with a handful of the S&P 500 companies already started announcing their results. However, unlike the second quarter where we saw a 5% plus growth rate, earnings estimates for the last quarter of 2014 remain quite low.

In fact, the estimates have fallen sharply over the last three months and the magnitude of the downward revision in Q4 was the highest that we have seen in roughly two years. Total earnings for Q4 are now expected to be up 1.2% on 0.5% lower revenues, significantly lower than the 9.6% growth expected at the start of the quarter.

However, one should note that this sharp slide in estimates is not the result of a fresh deterioration in overall corporate profitability, but is rather a reflection of a steep fall in oil prices over the past few months (read: 4 Sector ETFs to Watch for Gains in 2015 ).

The negative revision in estimates was widespread across sectors with estimates having declined for 13 out of the 16 Zacks sectors. Construction, Utilities and Business Services are the only sectors where estimates have modestly gone up.

Below, we have highlighted three sectors and their respective ETFs that have witnessed downward revisions the most. Investors should clearly avoid these sector ETFs to prevent any severe drop in their portfolio values for the 2014 Q4 earnings season.

However, one should also keep a close eye on management commentary about business conditions given global growth worries. In case there is any favorable change in management commentary or outlook in spite of lackluster earnings from these sectors, traders might consider some bottom fishing in the below mentioned ETFs.

The negative revision was the most prominent for the energy sector, with the sector now expected to report a 20% decline in earnings as against growth of 7% at the start of the quarter. In fact, the Zacks Consensus Estimate for earnings for some of the sector leaders like Exxon ( XOM ), Chevron ( CVX ) and ConocoPhillips ( COP ) have dropped 22.5%, 33.2% and 44.7%, respectively, over the last three months.

If that is the case, energy ETFs might continue to have a tough time going forward. This is especially true as the above three companies combined bring in roughly 45% of the sector’s total earnings.

Also, large oil and gas companies are reducing their capital expenditure plans following a sharp slide in oil prices over the past six months (read: Energy ETFs in Focus as ConocoPhillips (COP) Cuts 2015 Capex ).

Given this, investors should avoid products such as SPDR S&P Oil & Gas Exploration & Production ( XOP ), iShares U.S. Energy ETF ( IYE ) and Market Vectors Oil Services ETF ( OIH ) from this space. These products have lost between 10% and 30% in the past three months and currently have a Zacks ETF Rank #4 or Sell rating.

Basic Materials

Though the materials sector was one of the largest contributor to earnings during Q3 2014, the earnings estimates for the materials sector for Q4 have flipped from a growth rate of 22.5% to a decline of 6.1% at present (read: 5 Investor-Friendly Dow Dog ETFs for 2015 ).

Given this, investors should avoid ETFs like SPDR Materials Select Sector Fund ( XLB ), Vanguard Materials ETF ( VAW ) and iShares Dow Jones US Basic Materials Sector Index Fund ( IYM ). These funds currently have a Zacks ETF Rank #4 or Sell rating and are expected to underperform broader markets in the near term.

Industrials

The industrials sector is also expected to be a laggard this earnings season with the industry now expected to report an earnings decline of 2.8% as against growth of 4.7% at the start of the quarter (read:  Top Performing ETFs of 2014 and 3 Great Picks for Next Year ).

As such, investors should cautiously approach products like SPDR Industrial Select Sector Fund ( XLI ), Vanguard Industrials Index Fund ( VIS ) and iShares Dow Jones US Industrial Sector Index Fund ( IYJ ). The funds currently carry a Zacks ETF Rank #3 or Hold rating.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7  Best Stocks for the Next 30 Days .  Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report