stock marketMany of Wall Street's perpetually optimistic analysts are calling for a continuous profit boom that will exceed even the inflated, credit-fueled earnings of 2007. As second-quarter earnings season gets into full swing, though, the picture to emerge from companies harkens back to a grimmer time.

Much like the second quarter of 2009, when most economists believe the economy was in the last throes of a recession, bellwether companies are currently reporting stronger-than-expected earnings but lackluster revenue growth.

Cost Cuts Only Get You So Far

The problem is that companies can only rely on items like cost cuts to boost earnings for so long as top-line growth sags. But companies with broad economic exposure, such as General Electric (GE), and stumbling big-name banks like Citigroup (C) and Bank of America (BAC) have done exactly that. Even better-performing banks like JPMorgan Chase (JPM) have benefited from reducing the amounts they put on reserve for loans gone bad, thereby putting a positive spin on earnings.

General Electric, for example, reported earnings of 30 cents a share, ahead of the 27 cents that analysts had forecast. But revenue dropped 4% from a year ago to $37.4 billion -- and below the $38.4 billion consensus estimate.

Bank of America saw revenue drop to $29.5 billion, compared to $33.1 billion a year ago, and below the $29.6 billion analysts had forecast. Earnings, though, came in at 27 cents a share -- well ahead of the 22 cents analysts had predicted.

Citigroup saw shares hit after reporting revenue of $22.1 billion, shy of the $21.16 billion analysts were looking for. Earnings of nine cents a share, though, breezed by the five cents analysts expected.

Bears Winning?

The results so far show that investors should be vigilant at the very least about the sustainability and quality of earnings. Indeed, all three companies saw shares fall sharply on Friday amid a broader sell off.

They may also signal a turning point in the especially intense standoff between bullish and bearish camps. Bulls have had the upper hand over the last 15 months as dire predictions by doomsayers failed to materialize, and stocks rallied sharply.

The weak top-line results come at a time when a growing number of economic indicators point to a slowing economy. Key components like the housing market and unemployment, meanwhile, continue to limp along.

Bright Spot in Tech

Companies reporting the strongest results, meanwhile, have tended to be concentrated in growth areas like technology with especially big exposures to booming emerging markets. Take a look at the solid figures posted by chipmakers Intel (INTC) and AMD (AMD).

And Google (GOOG), a big beneficiary of Internet advertising's growth, bucked the trend by delivering roaring top-line results but falling short of profit estimates as it set aside funds to invest in its business.

Ultimately, though, it may be in a much healthier position than other companies beating earnings for the time being. Cutting to please Wall Street tends to take a toll.

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