Whether the cool spring, weak economy or devaluing yen are to blame, c-suites across the country seem to be preparing for the worst this earnings season.

Of the 121 companies that have issued second-quarter guidance so far, 96 are negative, only 15 positive and 10 in-line with Wall Street expectations, according to Thomson Reuters data. With a negative-to-positive ratio of 6.4, the quarter's sentiment is on track to be the worst of any earnings season since the first quarter of 2001. 

Yet, earnings per share, a bellwether of corporate health, is expected to be just shy of records set in the first quarter. It's a sign that, while executives are worried about missing top-line expectations, cost cutting continues to help drive bottom-line growth.

At the same time, overall EPS growth almost always tops estimates posted at the start of the season, with Christine Short of Capital IQ saying growth historically beats estimates by 3% to 4%. Projections are typically low-balled, she said, particularly during times of uncertainty.

EPS remains near all-time highs, with current Capital IQ estimates showing S&P 500 EPS rising 3.41% to an average of $26.55 in the current quarter, which is just shy of the previous record set in the first quarter of $26.71. 

If the 3% to 4% bounce-back trend stays true, Short says this quarter's growth rate could reach as high as 7%, which would put it on track to exceed last quarter's record. 

“If we factor that bump in, it’ll put companies on track to have a stronger earnings growth season,” she said.

Meanwhile, strong data in the U.S., particularly in the consumer market, which makes up much of GDP, and other bellwether-industries such as autos and housing, have lifted overall economic sentiment. The major indices have rallied through the first half of the year.

Earnings season, which officially kicks off with Alcoa (AA) on July 8, “will end  up better than it looks now,” said Thomson Reuters’ corporate earnings research analyst Greg Harrison, noting estimates typically bottom out ahead of earnings season.

Why So Blue?

However, corporations are heading into this season far more bearish than usual, which  could weigh on the typical bounce-back trend. 

“Over the long term, sentiment is always more negative than positive, the difference is  the extreme nature of it this quarter,” Harrison said. “It won’t be as strong a bounce back as usual.”

Among those to cut their outlooks heading into the second-quarter earnings season  were Texas Instruments (TXN), which narrowed its quarterly outlook citing weak PC sales and DuPont (DD), which warned that first-half earnings will likely fall more than expected amid unseasonably cool weather.

After several quarters focused on streamlining, Harrison says the effects of cost-cutting  are starting to wear off, which is one reason why c-suites are more bearish than usual. 

“A lot of companies have cut costs, laid people off in order to maintain margins,”  Harrison said. “But at some point the top line of the business has to start growing in order to continue earnings growth.”

Broader macroeconomic headwinds have also weighed on outlooks, with many  companies pointing to the weakening yen that has impacted foreign exchange rates,  China’s slower-than-expected growth and ongoing debt woes in Europe.  

Revenues increased just 0.9% among S&P 500 companies in the first quarter and are  only expected to grow by 0.46% in the second quarter, according to data from S&P Capital IQ. Even as sales pick up in the second half of the year ahead of the holidays, overall 2013 revenue is forecast to improve by just 3.57%, lower than last year’s growth of 4.18%.

Harrison says the overall sentiment from companies commenting on their results will likely describe general economic slowness, with executives claiming the economy is not growing fast enough for sales to keep pace with analyst expectations.

Follow Jennifer Booton on Twitter at @Jbooton