FORTUNE — The unofficial start of corporate earnings season kicked off Monday, with Alcoa (AA) announcing how it did during the start of the year. The world’s largest aluminum maker reported better than expected earnings as demand from U.S. automakers increased, but revenue fell short of expectations.
Alcoa isn’t going to be the only company to report mediocre earnings for the quarter. Across Standard & Poor 500 companies, the gap between stock prices and earnings is expected to widen, analysts say. U.S. stocks started the year reaching record highs, but earnings growth also likely slowed. This is unusual, since stock prices typically rise and fall in tandem with earnings.
While investors are betting companies will do better later this year, earnings growth for the first three months of 2013 is expected to fall 0.6%, according to a report released by Factset last week. If that happens, it will mark the second year-over-year decline in just four years (the last dropped happened in the third quarter of 2011).
The slowdown comes largely from a handful of sectors — namely, the information technology and energy industries. Earnings growth in information technology is expected to decline 3.9% — driven largely by Apple (AAPL), which for the first time in years reported disappointing earnings at the end of 2012. As the fortunes of the maker of the iPhone and iPad have climbed, it has become increasingly difficult for the Cupertino, Calif.-based company to meet, much less exceed, analysts’ continuously high expectations.
Earnings per share for Apple could fall to $10.12, lower than the $12.30 recorded a year earlier, Factset estimates. If the company were excluded, earnings growth across S&P’s information technology sector would actually rise 0.2%. By contrast, Microsoft (MSFT) is expected to see earnings per share grow at their fastest pace in nearly two years, rising to $0.76 from $0.60 a year ago.
Of all sectors, however, energy is expected to see the slowest growth in earnings, according to Factset. Earnings are expected to decline by 4.3%, reflecting a particularly weak coal industry and lower oil prices as China’s economy slows down and Europe deals with its ongoing debt problems.
And don’t bet the banks will save this earnings season as they struggle to make higher profits on the deposits they lend out amid record-low interest rates. Financial sector profits are forecast to grow 3.8%, a significant drop from the 16.6% growth rate during the fourth quarter and 11.7% during the third quarter, according to Factset.
Nonetheless, stocks continued to soar Monday ahead of Alcoa’s earnings announcement. While investors might see a slower start of the year, the rally signals they are much more hopeful about the rest of the year. Earnings growth is expected to return to double-digits in the financial sector, led by companies such as Bank of America (BAC) and Citigroup (C), according to Factset.
Admittedly, investors were just as hopeful, if not more so, this time last year. As it turns out, they were overly optimistic, having estimated that earnings per share across the S&P would end the year at $28.34. It actually ended lower at $25.75 per share.
Today analysts expect earnings per share will end 2013 at $29.47, but who knows where it will finish. If stock prices are indeed an indicator, the awfully slow start this year might just be a distant memory.