Earnings growth is running at nearly 8 percent for the first quarter, better than expected, but are issuing negative outlooks for the second quarter by a ratio of 3.3 to 1, the worst ratio since late 2008, according to Thomson Reuters data.

That ratio this week briefly rose to 3.9 to 1, the worst in more than a decade.

It is a sign that executives are worried about the U.S. and global economies, and helps explain why stocks have failed to react vigorously when companies come out with results ahead of what Wall Street expects.

"Companies are looking out there and saying we don't know what's going to happen in Europe. The U.S. economy is growing at a modest pace, but there's a lot of uncertainty around it. So... they're behaving as if they're nervous," said Jonathan Golub, chief equities strategist for UBS in New York.

The gulf between expectations and results has been a common theme in the U.S. corporate profit recovery, and has usually led to a higher-than-average percentage of companies beating expectations.

In past quarters, this was welcomed by investors, but it is coming as less of a surprise given the habitual caution ahead of results and the lackluster commentary from companies.

S&P 500 first-quarter earnings growth is currently 7.8 percent, up sharply from 3.2 percent just before the reporting period began. However, second-quarter growth estimates have declined in that time, and third-quarter forecasts are just marginally higher.

Companies have good reason to be cautious. The U.S. recovery has been sluggish. After fourth-quarter growth of 3 percent at an annual rate, first-quarter growth has slowed to 2.2 percent, and the second quarter also suggests sluggish growth.

Dow component Procter & Gamble (>> The Procter & Gamble Company) cited sluggish U.S. growth in cutting estimates for its fiscal year ending in June, with Chief Executive Bob McDonald telling analysts: "What's happening is, obviously, you've got a higher fuel price, you've got other macroeconomic headwinds like housing and other things."

Overseas growth is lackluster. China is slowing, and euro zone surveys suggest contraction in both the manufacturing and services sector.

Low visibility across the global economy has kept outlooks from rising with earnings growth, Barclays analysts wrote in a research note.

This has companies holding back on spending not just in hiring, but in areas such as advertising and research and development, Golub said. Private U.S. employers added just 130,000 jobs in April, the Labor Department said Friday, short of expectations.

DISCONNECT POINTS TO WORRY AHEAD

The disconnect between expectations and results is apparent in the current earnings period. With results in from more than 400 of the S&P 500 components, 68 percent have beaten profit expectations, above the 62 percent long-term average, Thomson Reuters data showed.

Investors have caught on to the fact that low expectations mean more earnings beats, and as such, have not been rewarding companies with big stock gains.

Shares of companies beating estimates outperformed the S&P 500 by an average of 65 basis points in the week after earnings, Goldman Sachs analysts said in a research report. That compares with an average of 250 basis points last quarter, they said.

Yet the pattern of a high percentage of companies beating estimates could be repeated in the second quarter. Second-quarter earnings forecasts have barely budged, so a large percentage of companies could vault a low bar again, Golub said.

S&P second-quarter earnings growth is seen at 8.9 percent versus an April 1 forecast of 9.2 percent, while third-quarter growth is seen at 5.6 percent versus April's 5.3 percent.

The S&P sector with the worst negative-to-positive guidance ratio so far is health care <.GSPA>, at 8 to 1, according to Thomson Reuters data.

St. Jude Medical Inc (>> St. Jude Medical, Inc.) Chief Executive Dan Starks, following the company's better-than-expected first quarter results and a weak forecast for the second quarter, told analysts: "We really think there is value to erring on the side of being conservative, if we are going to err at all."

In the tech sector, which has given more guidance than any other sector, Juniper Networks (>> Juniper Networks, Inc.), Qualcomm (>> QUALCOMM, Inc.), Lexmark International (>> Lexmark International Inc) and even Apple (>> Apple Inc.) all gave lower-than-expected outlooks.

On the Juniper's conference call following results, CEO Kevin Johnson said "there are still significant headwinds in Europe... we've seen service providers be very cautious in their capital expenditures."

Other sectors, like the financials, have offered almost no guidance on future earnings.

Analysts at Keefe, Bruyette and Woods raised questions about the quality of earnings for the banks. Companies in that sector have seen fewer upward revisions, with KBW analysts saying earnings have been boosted by unsustainable factors, including mortgage banking and trading income.

A thin silver lining is this: While more companies are guiding lower, the rate at which they are cutting estimates is easing, said Key Private Bank Director of Research Nick Raich, suggesting "second quarter estimates are probably too low."

The question is whether fourth-quarter estimates are still too high and will come down to reflect the current worries. Fourth-quarter growth is forecast at 15.9 percent, Thomson Reuters data showed.

"Where we're going to hit a roadblock is, expectations start to get high in the end of 2012 and the beginning of 2013," Raich said.

(Reporting By Caroline Valetkevitch; Additional reporting by Edward Krudy; Editing by Tim Dobbyn)

By Caroline Valetkevitch