Still, high oil prices do benefit the energy sector, and earnings from this group are expected to add more than 4 percentage points to overall growth in the fourth quarter.

"I have been and remain of the view that earnings and economic momentum peaked in the third quarter of 2003," said Jeffery Saut, chief investment strategist at Raymond James. "We're regressing to the mean."

Saut noted that because profit growth surged more than 20% in the first and second quarters of 2004 and remained high in the third and fourth quarters, companies will face very tough comparisons this year. In addition, he said, the possible expensing of stock options could weigh on the results.

Although companies are expected to keep their costs in check over the coming year, analysts say operating margins aren't likely to expand from historically high levels. What's more, they say, any gains from a weaker dollar should be treated with caution. A soft dollar can boost demand overseas for U.S. goods and can make currency translations more favorable.

"You don't want to pay for growth that comes strictly from a weaker dollar," said Ed Keon, chief investment strategist at Prudential Equity Group. "That is always a lousy idea."

The bulk of fourth-quarter earnings will be released in the two weeks beginning Jan. 17. As has been the case in recent quarters, energy, basic material and technology companies are expected to post the strongest growth; telecom, utilities and consumer discretionary companies will be among the weakest performers.

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