Corporate earnings raced past forecasts in the first quarter, sending markets jumping. So will the trend continue in the second quarter? Probably not, some say.

Second-quarter earnings are expected to rise by 6% on average for companies in the S&P 500, down from 13% in the first quarter, according to Thomson First Call. The market-research firm also says warnings are significant: For every company expecting to meet its earnings goals in the second quarter, 2.1 have warned that they will miss estimates. Last year during the same period, the ratio was 1.2 to 1.

Also, things look different this time around for the energy sector. Profits among oil companies are due to slow to a 33% growth rate in the second quarter, from 180% in the first three months of the year. Oil prices had spiked amid the war with Iraq, but have since subsided. Excluding gains in energy, companies are expected to see earnings grow by 4.3% on average this quarter. In comparison, earnings rose 5.9% in the first quarter without the help of oil companies.

"Earnings came in much better than expected in the first quarter , but certainly energy is part of the picture, and they won't get that same boost this time around," said Ken Perkins, research analyst at Thomson Financial.

In the first quarter, 62% of companies beat analysts' earnings estimates. But Perkins pointed out that earnings in that period had a weak basis of comparison: First-quarter profit in 2002 dropped almost 12%, which made this year's first quarter look much rosier. In the second quarter of last year, earnings rose 1.4%. Also, projections were very low coming into the latest first quarter, with the ratio of negative to positive preannouncements at 2.8 to 1.

Still, analysts say it's too early in the race to have a precise idea of how earnings will look by midyear, and the numbers can shift amid changes in the economy and the broader market. Investor sentiment is relatively high and stocks appear to be on an upswing, but the economy continues to falter, the job market remains in a slump and companies are still holding back on investment.

"The hope is that the consumer is going to become more confident, allowing business spending to pick up and companies to grow faster," said Doug Monieson, an independent trader at the Chicago Mercantile Exchange.

A few corporate heavyweights are painting an encouraging picture. Intel's ( INTC) president, Paul Otellini, recently said he sees signs of a rebound in the semiconductor sector, which could bode well for the company's second-quarter earnings. Cisco's ( CSCO) chief executive officer, John Chambers, said he is a "little more cautiously optimistic" about sales prospects. And Texas Instruments ( TXN) reiterated its second-quarter guidance despite estimates of slower demand for wireless products in China.

Indeed, China is one of the obstacles companies face in the run-up to the next earnings season. Many businesses operating in the region have pointed to severe acute respiratory syndrome, or SARS, as having a possible negative impact on second-quarter results. Those include Eastman Kodak ( EK), Motorola ( MOT), Microchip Technology ( MCHP) and Yum Brands ( YUM), parent of KFC, Pizza Hut and Taco Bell.

But for some companies that sell products overseas, there's good news: a weaker dollar. As the U.S. currency loses steam, products sold in dollars become cheaper on a relative basis, which is usually followed by higher demand for U.S. exports.

"A weaker dollar is good for exporters, for the trade balance, and is inflationary. And we could use a little inflation now," said Al Goldman, chief market strategist at A.G. Edwards.

In the end, second-quarter results shouldn't be taken at face value, experts say. "The numbers will be difficult to interpret and you won't be able to make a valid judgment for the rest of the year . They were skewed by war, weather, business spending and other unusual factors, so we just have to wait for the third- and fourth-quarter results," said Jim Balestra, president of Balestra Capital.