The coming blitz of quarterly results may leave investors more confused than ever about the outlook for corporate profits and the economy

By Ben Steverman

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Apple, Microsoft, US Bancorp, and Dupont are all reporting earnings. Getty Images/Collage: Arthur Eves

For house investors, this earnings fit time is turning into the lost place.

This month, companies began unveiling their results from the 2008 third quarter, which included July, August, and September. And the next couple of weeks decree subsist especially officious, by 136 members of the large-cap Standard & Poor’s 500-stock index reporting earnings beneficial to the period of the week of Oct. 20, and another 114 firms the following week.

Investors are watching profits. results closely, desperate for some insight into some economy at a crucial tipping point. "We’re absolutely trying to possess a feel on to what degree the economy is beginning to falter," says Robert Bacarella, portfolio manager at Monetta Mutual Funds.

But the point in dispute, many professional investors say, is that the earnings outlook is just too hazy to make provision much useful information this quarter. At the very moment when investors are desperate for certainty, companies’ financial results from July and August—before the worst of the credit crunch hit—seem irrelevant.

Instead, sundry investors are listening to executives give their quarterly updates on future business conditions. However, crowd company management teams seem as confused as investors. Their statements are vague, and they slip on’t sound confident in past predictions.

Credit problems and financial turmoil have been on investors’ minds for greater quantity than a year, but place to the give faith to of shocks started hitting the plan in full force in the second half of September. Those troubles, which started with the failures of Lehman Brothers (LEH) and the bailout of insurer American International Group (AIG), have certainly shown up in early third quarter results.

According to Thomson Reuters, third part quarter income for the S&P 500 are expected to fall 9.1% from a year ago. That includes both actual results from the 82 companies that have reported, and analyst estimates for the remaining companies.

Three weeks agone, on Oct. 1, analysts were predicting S&P 500 earnings would empty only 4.8% from a year ago. Financial firms are in some degree to blame for the falling estimates. For example, Merrill Lynch (MER) on Oct. 16 reported a loss of $5.56 per share, while analysts were expecting a $5.22-per-share loss.

The stock market usually looks ahead, afflicting to predict coming earnings. So firms’ profits or losses from the summer— before the monetary crisis heated up—will generally be ignored.

However, says David Chalupnik, head of equities at U.S. Bancorp Asset Management (USB), financial earnings are an exception. He’s watching bank earnings self-same closely to make abiding, whereas it comes to credit losses, "they don’t affliction up." So far, they haven’t. "Expectations are very reverent," Chalupnik says.

More financial income arrive soon from financial outfits National City (NCC) and Fifth Third Bancorp (FITB), both on Oct. 21.