NEW YORK (CNN/Money) - So far, so good.

First-quarter results haven't been nearly as bad as many observers have feared. Even though warnings were coming in at an unusually heavy pace heading into the earnings season -- always a bad sign -- companies have beat estimates by a wider margin than usual.

It's early days yet, and this trend may not continue, points out Ehrenkrantz King Nussbaum chief market strategist Ozan Akcin. But he notes that something he calls "standardized unexpected earnings," which compares earnings not to the consensus of analyst estimates, but their range, is coming in quite well. (The closer a company comes to meeting or beating the highest estimate, the better.)

He also points out that these surprises have been most significant in economically sensitive sectors, suggesting that maybe business wasn't as horrible in the first quarter as everybody thought.

Companies in this report: 3M; Lockheed Martin; Pfizer; AT&T; AOL Time Warner; Boeing; Amazon.

3M's (MMM: Research, Estimates) stock is a real rarity in the world of investing -- it has risen by nearly 50 percent since the market topped out in March 2000.

That is especially surprising given that, as an industrial company, its business is closely tied to the ups and downs of the world economy. Through cost-cutting, 3M has been able to hold up earnings and escape the global economic malaise. Investors like it because it has shown it can weather the tough times, and they believe that when the good times come again, its lean cost structure will make for an earnings boost.

Why it matters: When the economy really does turn around, 3M will probably point the way. Thus far, even when most people were infected by the false hope that things were going to get better again, the company continued to sound a cautious note. When 3M says it sees improvement -- or, better yet, announces the stock-split investors have long waited for -- the all-clear signal will finally be sounded.

First Call forecast: $1.40 a share versus $1.23 a year ago.

One might think that, with the war with Iraq, shares of Lockheed Martin (LMT: Research, Estimates) -- the country's biggest military contractor -- would be in hot demand.

One would be wrong, however. Lockheed has been one of the stock market's bigger laggards this year, dropping 21 percent. The problem? When the nation is preparing itself for war, orders for Lockheed's products come pouring in, but during the time of war itself, money gets spent on more immediate needs, like fuel, food and ammo.

Lockheed could benefit now that the military phase of the campaign in Iraq has come to an end -- but there are still potential kinks. One is that the war made it clear that fighter jets, like Lockheed's F/A-22 Raptor, while cool, are not as necessary a part of the United States arsenal as back when the country faced off against rival powers with advanced fighter programs.

Why it matters: The world remains a dangerous place, and in response the United States appears to be drifting toward more of a cold-war attitude. If that's the case, more of the nation's money will be flowing into defense. In the long term, companies like Lockheed could stand to benefit.

First Call forecast: 42 cents a share versus 50 cents a year ago.

Pfizer (PFE: Research, Estimates) just closed its $60 billion purchase of Pharmacia, a move that makes the world's biggest drug company into even more of a powerhouse. Investors hope swallowing up yet another rival won't give the company a bout of indigestion.

The Pharmacia buy brings a host of new products into Pfizer's medicine chest -- Rogaine, Nicorette, a glaucoma treatment called Xalatan, an anxiety treatment called Xanax -- just as its Warner Lambert purchase did three years ago. But while the increased product range is nice, critics wonder if Pfizer is getting too bulky for its own good. Can such a big company efficiently develop the types of new products it needs to grow?

Why it matters: It's supposed to be a good market environment for big pharmaceutical companies like Pfizer, whose steady growth rates tend to attract investors when times are tough. But patent expirations across the industry are bringing competition from generic producers, and the pipeline for new drugs doesn't appear to have any blockbusters like Pfizer's Viagra was.

First Call forecast: 44 cents a share versus 39 cents a year ago.

As with its entire industry, it's been tough times for AT&T (T: Research, Estimates). The overbuilding of the late 1990s left the communications sector with a profound glut. Even now, after three years of pain, telecommunications companies are only using half of the capacity they have laid down.

When you have too much of what you sell, whether it's winter coats or ball bearings, you put it on sale. That's what's begun to happen in the telecommunications sector, where companies are cutting prices to maintain market share. AT&T and its peers must also deal with WorldCom, which is set to emerge from bankruptcy washed free of debt. That could allow it to cut prices deeply.

Why it matters: One of the most widely owned companies in the country -- sometimes it seems like everybody's grandma left them some shares -- AT&T will be the focal point during what could be a dangerous time for the telecommunications sector. There has been a wave a bankruptcies, and more could be coming. The fire sale in the telecommunications sector has just begun, and nobody knows who will be left standing.

First Call forecast: 52 cents a share versus 30 cents a year ago.

The proud parent of CNN/Money hasn't been standing so tall lately.

After losing $98.7 billion last year -- more than the company is currently worth -- the company continues to deal with the hangover effects of the merger that made it. Its online unit remains the major worry, and some investors worry the contraction in AOL's (AOL: Research, Estimates) dial-up subscription base, which fell in the fourth quarter, is irreversible.

Investors are keen to know what steps AOL is taking to shore up its business, and just as importantly, how its efforts at shedding "non-core" businesses are proceeding. When will the initial public offering for Time Warner Cable, initially slated for the current quarter, actually happen? And what about the rumored sales of other assets -- like its sports teams?

Why it matters: AOL is often seen as a lingering memory of the era of excess that joined America Online and Time Warner. But maybe it's also beginning to be seen as something else -- a great, big, unwieldy entertainment conglomerate. Now the company is being forced into slimming down. The degree to which it succeeds will serve as an example -- or perhaps a counter-example -- for the entire industry which is infected with a similar bloat.

First Call forecast: 5 cents a share versus 18 cents a year ago.

It's hard to remember that just two years ago, Boeing's stock was one of the market's highest flyers, pulling free of the malaise infecting both Wall Street and the economy. But in the post-Sept. 11 world, Boeing has been one of the bigger losers, as airlines, fighting for survival, have cut back heavily on orders for aircraft.

Unfortunately, it doesn't look like the pain is going to subside anytime soon. American Airlines' parent, AMR -- one of Boeing's biggest customers -- is teetering along the edge of bankruptcy.

Why it matters: The way things look now, Boeing needs to rethink its business, shifting its focus away from passenger aircraft and toward defense. That shift may be part of a changing dynamic not just for Boeing, but in the entire industrial world.

First Call forecast: 32 cents a share versus 75 cents a year ago.

Shares of Amazon (AMZN: Research, Estimates) have been on a tear, rising 69 percent in the past year to levels not seen since late 2000. Critics sniff that the company, though it has turned the corner to profitability, is just way too expensive -- its shares trade at 78 times expected 2003 earnings -- and set for a fall.

The key for Amazon to justify its high multiple is whether it can post really stellar earnings growth. Odd as it may seem, the potential is there. Amazon's profit margin -- the amount of sales that make it down to its bottom line, looks to be just around 0.5 percent. In contrast, Wal-Mart's profit margin tends to be in the 3 to 5 percent range. If you buy into any of that new-economy stuff, Amazon should be at the point where as sales increase, costs will rise slightly, paving the way toward an earnings explosion.

Why it matters: Amazon is clearly that rare thing from the dot.com days -- a survivor -- which in itself is an accomplishment. But now is the time we find out if it can meet its early hype of turning into a retailing juggernaut with a much lower cost basis than its bricks-and-mortar peers. That could signal as big a shift in the world of retailing as when Wal-Mart took over from the old department stores.

First Call forecast: 4 cents a share versus a 1-cent loss a year ago.