The fourth-quarter earnings season was like a bad rash.

No matter how much investors wished all that earnings talk would go away, companies kept releasing earnings or telling analysts about future earnings. The result was an endless barrage of earnings-related news that started in the middle of December and has yet to slow down more than three months later.

"There's usually a pause between earnings and the confessional season," said Joseph Kalinowski, equity strategist and earnings tracker with

Thomson Financial/First Call

. "But this year, there was no lull between the fourth-quarter earnings releases and the first-quarter confessional season. The earnings news just kept coming. In fact, I'm not even sure if all the companies in the

S&P 500 have announced yet."

First-quarter confessional season started early this year and still hasn't wrapped up. According to Kalinowski, 984 companies have preannounced and/or made comments about future earnings. But that's nothing. The Thomson analyst said that number could reach 1,300 in the next three weeks -- right up until when first-quarter earnings will be released. There's just no rest for the wicked.

Two major factors contributed to the onslaught of earnings news. A slowing economy forced many companies to bring down guidance that was overexuberant after years of sky-high growth. And

Regulation FD

, which requires companies to disseminate information to the public at the same time it makes comments to analysts, gave them the impetus to do just that.

"Since the new Regulation FD came into play -- and certainly news was plentiful -- it seems like you have a continuous earnings season," said Peter Cardillo, chief investment strategist with

Westfalia Investments

. "It changed the marketplace because analysts don't get the news in advance. Before, you'd have creeping news flowing into the market and analysts would act before the news release. Now with every new surprise, stocks get punished."

And punished they've been. Since Dec. 1, the

Nasdaq Composite Index has fallen 31%, the S&P fell 12% and the

Dow Jones Industrial Average has crashed through the 10,000 level, falling 5%.

According to data from First Call, the S&P 500 had a quarterly growth rate of 19% during the first three quarters of 2000. But in the fourth quarter, growth screeched to a halt, coming in at 3.5%. The slowdown crippled companies and forced them to recast their economic fortunes in an environment that was unlike any they'd faced in years. Analysts, in turn, dashed to bring down guidance to reflect the new reality.

Tidal Wave!

As a result, the earnings season unfolded in waves as companies made noise, which rippled through related sectors. Back in the middle of December, warnings from

Compaq

(CPQ)

,

Gateway

(GTW)

and

Apple

(AAPL) - Get Report

started trouble in the PC sector, forcing many analysts to drop their estimates.

Intel

(INTC) - Get Report

and the chipmakers followed, then

Microsoft

(MSFT) - Get Report

and software companies. Soon after, networking equipment maker

Cisco

(CSCO) - Get Report

warned about future profits and, bit by bit, companies have been adjusting guidance lower ever since.

"It was a wake up call to these companies that they were not immune to the downturn. Guess what, you're not," Kalinowski said.

In some cases, companies have warned only to warn again, turning earnings season into an arduous process, not a singular event. Look at

Nortel

(NT)

. Back on Feb. 15, the company pretty much came out and said that there would be no growth during 2001, a very grim prediction. At the time, many were still saying that the economy would definitely bounce back during the second half of the year, thanks to a pair of January interest rate cuts. And as Nortel warned, others followed -- triggering another wave of preannouncements and analyst revisions and jeopardizing dreams of a second-half recovery.

Great Expectations

The upshot of this phenomenon is that analysts have had to scramble to figure out what companies are going to make going forward, causing great disparities between expectations.

Kalinowski tracked the coefficient of variation, or difference, between analyst estimates on the technology portion of the S&P 500. A high number on the calculus-sounding datapoint shows a greater amount of disagreement. For much of 2000, the coefficient was at historical lows as placid analysts saw their targets easily met. "Since then, that number has spiked to highs," he said. "And there's a lot less agreement now."

Sometimes, it's possible to slam on the brakes and screech to a halt. But analysts and companies have been riding the brakes for the past few months, attempting to salvage something from the remainder of the year. After once topping analyst estimates by a big margin, companies tried desperately to meet lowered fourth-quarter expectations and had to do an awful lot of talking to accomplish even that.

"The biggest trend we've seen is that companies aren't killing estimates. Previously, they weren't just beating the estimates -- they were crushing them," Kalinowski said. "On average, 66% of the S&P 500 was beating estimates by 4.5% or more. But now, only 55% beat consensus -- by less than 1%."

Unfortunately, this new trend doesn't show any signs of slowing. "I suspect more carnage. Don't expect earnings targets to stay where they are. That doesn't necessarily mean that stock prices can't move up ahead of that, however," said Westfalia's Cardillo.

In just two short weeks,

Yahoo!

(YHOO)

will report the results of its first quarter on the same day as

Motorola

(MOT)

, the beginning of the next announcement season.

Unfortunately, it doesn't seem like the last one has ended yet.