Earnings season is just over a month away, but the early signals are not comforting.

Companies cutting forecasts outpace those raising estimates by the greatest ratio in 10 years, and some sectors, such as materials, have seen a dramatic fall in expectations for the soon-to-be ended fourth quarter, according to Thomson Reuters data.

It is a stark reminder that even as U.S. economic data has improved in recent weeks, the euro zone debt crisis and concerns about slowing growth in China still cast a long shadow.

Estimates for fourth-quarter S&P earnings growth have tumbled over the past two months as global macroeconomic headwinds prompted analysts to slash forecasts.

The S&P is now seen posting earnings growth of 10 percent in the fourth quarter, down from a forecast for 15 percent growth on October 3.

With all the uncertainties out there - from geopolitical issues to the risk that we could be headed towards another recession - this suggests the economy is barely keeping its altitude above the tree line right now, said Michael Mullaney, a portfolio manager for the Boston-based Fiduciary Trust Co.

It's good that we're still expecting growth, but it is nowhere near as robust as what we were expecting, to a significant degree.

Recent setbacks in seeking a resolution to Europe's debt crisis, along with tepid growth in the United States and concerns about a hard landing in China, have contributed to the weaker estimates since October. Many analysts fear that a spreading of Europe's problems will erode domestic bank profits and contribute to already sluggish consumer demand.

The S&P <.SPX> is down 1 percent year-to-date, after closing out its best week in more than two years on Friday. Before that it had been down 7.9 percent year-to-date in 2011.

Estimates have dropped for all 10 S&P sectors, but materials <.GSPM> have been hit hardest. Profits for the group are now seen contracting 0.9 percent, a sharp reversal for expectations of growth of 25.6 percent as of October 3.

Among specific stocks, both AK Steel Holding Corp and U.S. Steel Corp are now both forecast to post losses, a change from prior forecasts for profits. Earnings projections for Freeport-McMoRan Copper & Gold Inc have dropped 43 percent, according to StarMine data.

Estimates for two other sectors have also turned negative since October 3, with telecom <.GSPL> seen contracting by 4.9 percent and utilities <.GSPU> contracting by 4.5 percent. The October survey forecast growth of 5 percent and 3.6 percent, respectively. Among other sectors, the outlook for financials <.GSPF> has dropped to earnings growth of 18.6 percent from 26.6 percent.

Mullaney, who helps manage $9.5 billion, noted that defensive stocks are coming off a relatively strong period, so year-over-year comparisons won't be as good, especially with fears about the economy slowing.

According to Thomson Reuters, 88 S&P companies have issued negative earnings preannouncements for the fourth quarter, compared with 25 positive announcements, creating a ratio of 3.5, the largest since the second quarter of 2001.

In the year-ago period, the negative to positive ratio was 1.7, below the long-term aggregate of 2.3.

Among notable profit warnings, BlackBerry maker Research in Motion on Friday said it no longer expects to meet its full-year outlook, citing weak sales, a write-down on inventories of its PlayBook tablet and charges related to an October service outage.

U.S.-listed shares of RIM slumped 9 percent to $16.90.

(Editing by Leslie Adler)

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