With second-quarter earnings all but tallied, bankers and bank analysts alike are now undertaking the task of generating a cogent set of second-half expectations.

Given the concerns about credit quality, interest-rate margins and weakening investment trends, the fact that many banks dodged major damage and topped Wall Street estimates was some solace in a quarter that saw massive charges and restructurings at Bank One Corp. and First Union Corp.

A read of analysts' outlooks shows uncertainty still reigns.

For one thing, the expectations game that analysts and corporate America play each quarter to get estimates in line with earnings just ahead of reporting dates has created its own feedback mechanism. Now, companies and industries are judged not so much on how they perform relative to expectations but on how well that relative performance stacks up against history.

Putting it simply, First Call director of research Charles Hill said, "The banks beat the estimates this quarter by somewhat less than they normally do."

There were bright spots - Chase Manhattan Corp. and Citigroup Inc. both put up stronger-than-expected numbers, while J.P. Morgan, whose results have become almost impossible to predict because of the effect of trading revenues, trounced forecasts. Banks like SunTrust Banks Inc. and PNC Financial Services Group Inc. showed that credit quality issues were far from universal.

In a quarter that saw analysts do more last-minute number-shuffling than usual - by the end, published estimates called for an actual decline in quarterly operating profits (see chart) - Mr. Hill's observation carries added significance. Analysts, quick as they were to adjust, simply could not ratchet down estimates fast enough.

And there were indications that analysts have become as frustrated with the process as have the companies they cover. A complicated profit report from Fannie Mae prompted several analysts to question the company's method of reporting certain transactions, leading Fannie to issue a statement from its accounting firm a day later defending the practice.

Such squabbling might be amusing if not for the intellectual momentum building to rely more heavily on market intelligence as a mechanism for watching banks' performances. Of course, the call for such a shift is almost always coupled with a desire to see data provided to investors on a more open basis.

But there are plenty of signs that investors don't quite trust the information they are getting now.

For example, banks' stock prices have been stuck at a steep discount to the rest of the market. The discount applies to companies with as wildly divergent profitability as Chase Manhattan and Bank One.

Some portion of the valuation disadvantage is a permanent feature, said Edgar Peters, who is chief investment strategist and director of asset allocation at Boston-based PanAgora Asset Management Inc. It stems, he said, from the difficulty many investors have in gauging quarter-to-quarter performance. "They tend to have a lot of hidden things happen to them, so there's a risk premium built in."

And he expressed skepticism about the usefulness of Wall Street research, at least as currently served up, as an indicator of future earnings.

Looking at the S&P 500 since 1986, he said, actual earnings growth rates have tracked in a wide range, between +40% and -17%, while forecasted earnings have kept to a range between +30% and +10%. Using just the simple growth rates of past earnings produced a much stronger correlation than analysts' estimates, he said.

Any long-term lessons the market takes away from this past quarter have yet to show up in current analysis. First Call's database shows expectations of profit growth have held steady at 6% for the third quarter and 4% in the fourth quarter throughout the earnings period. Based on what has happened in recent quarters - and looking to second-quarter results as a guide - those numbers are likely to come down, but later rather than sooner.

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