NEW YORK (CNN/Money) - Earnings season is upon us once again and it looks like it is going to be good.

Analysts polled by First Call think S&P 500 company profits grew by 15.8 percent in the third quarter versus a year ago -- 12.5 percent if you take out the effects of Lucent's massive write-down in the third quarter last year.

Earnings on tap Click on any company to jump straight to discussion. Company (ticker)  Report date  Johnson & Johnson (JNJ)  Tuesday a.m.  Bank of America (BAC)  Tuesday a.m.  Intel (INTC)  Tuesday p.m.  General Motors (GM)  Wednesday a.m.  IBM (IBM)  Wednesday p.m.  Coca-Cola (KO)  Thursday a.m.  Nokia (NOK)  Thursday a.m  United Technologies  Thursday a.m.

Odds are that the earnings, when they come, will be much better than forecast. Analysts have been unusually conservative with their estimates this year, and signs are that this conservatism continued into the current reporting period. The economy grew much faster than expected in the third quarter, but with the exception of the energy sector, estimates have barely budged since Aug. 1.

For investors, the question is whether better-than-expected earnings already have been priced into the market.

We're about to find out.

The health-care and consumer products heavyweight took a big step ahead of its rivals in April when it became the first company to bring a drug-coated stent to market in the United States. These devices are forecast to double the global stent market to $5 billion by 2006, setting up Johnson & Johnson for some solid earnings. The first sales numbers for the stents are likely to show up in the company's third-quarter bottom-line report.

But rivals are fast on J&J's trail, with Boston Scientific likely to have a major competitor to J&J's product available by the end of the fourth quarter. J&J has vowed in recent weeks to lower prices and make other moves to stay competitive. Its third-quarter earnings and forecast will need to reflect that.

642 802 696 322   382   582   companies reporting:     120   beat expectations:     79   met expections:     20   short expectations:     21   January 24, 2005 Fourth quarter 2004 warnings and surprises to date.

The stent issue is just one of many for the company. Like most others in its sector, J&J remains vulnerable to the threat of all kinds of competition, including rivals producing competing drugs, generic drugmakers taking advantage of patent expirations on some of its most lucrative products, and biotechs trying to cut in on the market for many of its medical devices.

On the upside, J&J's second-quarter earnings came in better than expected and showed a rise from a year earlier, excluding one-time charges due to acquisition-related costs. The quarter's success was due mostly to strong sales of medical devices and prescription drugs. Investors will want to see that these segments of its business have held up during the third quarter.

Why it matters: The company is the second largest in its sector in terms of market cap -- second only to Pfizer -- and is the first in the group to report results. How it performed in the third quarter and what it has to say about the current quarter and fiscal year will be seen as a proxy for a number of other major companies that are due to report the following week.

Additionally, the weak dollar should have been helpful to a multinational like J&J. Such companies should do well when the dollar slides, because the weakness makes their products more competitive internationally. If the dollar's weakness did in fact help, that would be an encouraging sign for the earnings of other multinationals.

First Call forecast: 68 cents a share versus 57 cents a year earlier.

Of the three biggest U.S. banks, Bank of America (BAC: Research, Estimates) weathered the economic downturn best. Lacking the global reach and the big investment banking businesses of J.P. Morgan and Citigroup has been an asset for the bank, as were its efforts to reduce risky loan exposures.

But Bank of America doesn't lack challenges going forward. First, after being relatively sheltered from the financial scandals that shook the country over the past two years, it now finds itself at the center of a New York State Attorney General probe into allegations it allowed a hedge fund to trade its mutual funds after market hours.

Second, with rates on the rise, Bank of America will need to find ways to be less reliant on its mortgage business to generate earnings. Investors will be looking for signs that business lending is growing.

Why it matters: Business loan growth wouldn't be just a good sign for Bank of America; it would be a good sign for the American economy. If businesses are willing take on new loans, that would be a sign that they are becoming less risk averse. If that's the case, they might even start hiring back workers.

First Call forecast: $1.70 a share versus $1.45 a year ago.

The world's largest semiconductor company has, pardon the pun, already placed its chips on the earnings table. Intel (INTC: Research, Estimates) raised its third-quarter sales and gross margin guidance in August and tightened its revenue outlook last month.

PC sales seem to be picking up and Intel certainly is benefiting from this improvement. In particular, wireless notebooks, many of which use Intel's new Centrino chipset, appeared to be hot sellers during the summer.

Analysts expect Intel to report sales growth of 18 percent in the third quarter. And for a company (and sector for that matter) known for boom-bust cyclicality, that level of revenue growth points to good times finally being here again.

As a result, investors have not surprisingly embraced Intel. Shares are up nearly 90 percent year-to-date, making Intel by far the best performing stock in the Dow Jones industrial average.

But like many technology stocks, Intel now faces concerns about valuation. Shares trade at 28 times estimated earnings for 2004, a price Bernstein analyst Adam Parker thinks already discounts good earnings news for next year.

Why it matters: Intel's cautious management team went out of its way, after raising sales guidance, to point out that it still was not seeing major signs of a pickup in corporate technology spending. After all, the third and fourth quarters are typically strong for Intel due to the back-to-school and holiday shopping seasons.

So if Intel is slightly more optimistic during its conference call about the fourth quarter and beyond, that would be very good news for the tech sector and could provide further fuel for the group's explosive rally. But since expectations for Intel and tech in general are so high, a muted outlook could cause momentum investors to cash in their chips.

First Call forecast: 23 cents a share versus 11 cents a year ago.

Thanks to generous incentives from General Motors (GM: Research, Estimates) and other automakers, U.S. car sales kept steaming along through the tough times. But now comes the hangover.

GM has two big problems. First, it eventually will need to figure out a way to wean itself off the incentive programs to generate sales. (The car maker already has announced zero-percent financing programs for 2004 models.)

Then it has to deal with an auto market that may be approaching the saturation point. Auto sales fell short of expectations in September, and now that there are, according to the Transportation Department, more registered vehicles in the United States than there are licensed drivers, you have to wonder whether the sales slump is a sign of things to come.

Why it matters: Economists warn that you should never underestimate the American consumer's wherewithal to spend, but the American consumer's closet has never been so full. The economy where GM and other automakers falter is an economy that doesn't grow as quickly as bullish investors would like.

First Call forecast: 63 cents a share versus $1.20 a year ago.

Big Blue finally has broken out of a big slump. Shares of IBM (IBM: Research, Estimates) cracked the $90 level last month for the first time since April 2002 and the stock is trading just 2 percent below its 52-week high.

Perhaps no company stands to benefit more from a bona fide pickup in corporate technology spending than IBM, given that it has a major presence in hardware, software and services.

Investors have been pleased by news that IBM regained the market share lead in servers from Hewlett-Packard in the second quarter. In addition, IBM's global services unit (i.e. consulting and outsourcing) keeps winning big contracts, most recently getting 10-year deals to take over human resources functions for insurer Lincoln Financial and consumer products giant Procter & Gamble.

Still, there are myriad concerns facing IBM that investors can't ignore. First, the SEC still is investigating accounting practices from 2000 and 2001 in IBM's retail store solutions division (which sells kiosks to retailers).

And there are many Big Blue skeptics who say IBM's earnings quality is not great. To that end, IBM's sales growth in the second quarter would have been substantially lower if not for the weaker dollar, which has helped multinational companies.

Why it matters: IBM is the most diversified of the large cap tech companies. In one earnings report, investors can get a good feel for how the likes of HP, Dell, Microsoft, Oracle and EDS might be doing.

First Call forecast: $1.03 a share versus 99 cents a year ago.

If a hot summer, a weak dollar, a surge in Vanilla Coke sales and rival PepsiCo's upbeat earnings are to be taken as a harbinger for the industry, results should be pretty good for one of the world's most prominent consumer brands.

Coke's (KO: Research, Estimates) strong second-quarter earnings didn't impress everyone. Some analysts pointed out that profits were boosted by a lower-than-expected tax rate. North American and international volume growth failed to meet some estimates, particularly for the company's beverage products.

To satisfy the naysayers, Coca-Cola will need to show that it's been able to accelerate its volume growth in both North America -- as PepsiCo was able to -- and in places like Japan, worrisome to analysts because it is the company's biggest international market and the source of nearly 15 percent of its overall profit.

The company also needs to be able to show that it can compete in an increasingly health-conscious environment by continuing to grow its non-core water and juice brands, including Dasani and Evian.

Why it matters: Most analysts expect third-quarter earnings to be very strong, with the hope that this will both reflect and bolster an improving economy. As one of the most recognizable brands in the world, positive earnings from Coke would seem to confirm that upbeat outlook.

The weak dollar should have helped so-called "multinationals" such as Coke. A sliding greenback makes products more competitive internationally, which helps sales, and the revenue turned back into dollars adds to the overall earnings. If the king of the multinationals benefited from the weak dollar, it's likely others did too.

First Call forecast: 52 cents a share versus 45 cents a year earlier.

Remember when the only thing you really needed a cell phone for was to talk to people? Now there are phones that let you surf the web, send text messages, take pictures, listen to music and play video games. But are people willing to pay for such fancy phones?

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That's the key question for Nokia (NOK: Research, Estimates), the world's largest manufacturer of wireless phones. It warned last month that cell phone sales would be lower than expected in the third quarter even though unit shipments would be up. In other words, more phones are being sold but at lower prices.

Nokia's stock has lagged the tech rally, gaining just 11 percent year-to-date compared with a more than 40 percent run in the Nasdaq. The stock has been relatively flat since warning last month. Unless Nokia can give Wall Street some promising news about cell phone prices heading into the fourth quarter, its stock may continue to underperform.

But Nokia could face tougher price competition going forward from Motorola, the world's second-largest handset maker, now that Motorola is planning to shed its unprofitable semiconductor business in order to focus exclusively on communications equipment.

Why it matters: Nokia's problems are not unique. Many makers of consumer tech gadgets such as PCs and handheld devices face the same set of issues. Demand is there, but only if prices are lowered enough to stimulate it. And you can go only so far with the whole making-it-up-on-volume game. If companies like Nokia have to keep cutting prices, this filters down to the large number of firms that supply chips and components to hardware manufacturers.

First Call forecast: 19 cents a share versus 18 cents a year ago.

Signs of an economic recovery have propelled the stocks of cyclicals such as United Technologies (UTX: Research, Estimates) this year, with investors betting than a broad turnaround will be good for business at the companies that perform best in a faster-growing economy.

United Technologies' management seems to think so, too. The Dow component's CEO recently said that although orders and business aren't yet reflecting an upturn, he sees it in the pipeline for the second-half of 2004. He also reaffirmed the company's fiscal 2003 earnings forecast and said the company's share buyback and acquisition programs will remain aggressive next year.

But not everything is coming up roses for UTX. The sluggish market for commercial aircraft parts and services has hit the company just as hard as it has others in the sector. Strength in its other units, however, notably its building systems division, Otis elevators, and its heating and cooling systems division, Carrier, more than made up for the aircraft weakness in the second quarter. Second-quarter earnings beat estimates and rose from a year ago due to the strength in these units.

Standard & Poor's recently cut its rating on the company's debt by one notch, saying UTX's choice to raise its dividend 30 percent, its ongoing share buyback program and its $2 billion purchase of the U.K.'s Chubb PLC -- a maker of fire and security services -- will hurt the company's financial flexibility. But the S&P's action has had little impact on the stock price.

Why it matters: If United Technologies can continue to post improving earnings despite the pull of the aircraft market and the still shaky economy, that bodes well for the sector as a whole.

More significantly, strong earnings from the cyclicals would seem to confirm what their stock surge has been suggesting all year: that a period of economic expansion is indeed taking place.

First Call forecast: $1.24 a share versus $1.21 a year earlier.