(Repeats Jan. 23 column without changes)
* TSX/60 companies earnings seen up about 14 pct
* Recovery to start clipping lofty profit gains
* Equities seen pushing higher, but at slower rate
By Susan Taylor
OTTAWA, Jan 23 (Reuters) - High-flying profit gains at Canada's blue chip companies will start coming down to earth as the recovery takes hold and quarterly comparisons moderate, but they should to be enough to lift Toronto stocks to fresh multi-year highs.
Canada's fourth-quarter earnings season kicks off in force this week, with buoyant resource sector profits expected to more than offset weakness from companies, like export-oriented manufacturers, stung by a strong Canadian dollar. Sturdy results are also seen from the financial sector.
Tight corporate cost control, coupled with modest economic growth, will help fuel earnings and positive comparisons, though some analysts say profit expectations may be slightly high.
"The easiest comparisons, year-over-year, are behind us. They're still positive, but the comparisons are going to be tougher and tougher going forward," TD Waterhouse chief portfolio strategist Bob Gorman said.
"By and large, the (fourth-quarter) numbers are still going to be quite good and that reflects the fact that we're having decent, though sub-par, economic growth."
Equity prices will continue to climb as the quarterly results roll in, but the good times could come to an end if earnings decelerate in 2011, said Chad McAlpine, RBC Capital Markets' vice-president of quantitative analysis.
"The pullback that everyone is waiting for could be more than 10 percent and is most likely to fall in the middle of May as the first-quarter earnings season kicks off," he said.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE -- which hit a 28-month high earlier last week -- finished down 0.55 percent at 13,258.57 on Friday.
A Reuters poll last month showed analysts expect the index to end 2011 at 14,000. [ID:nN02241470] EQUITYPOLL1
The index stumbled after robust Chinese growth data sparked fears the world's second-largest economy would move aggressively to choke off demand.
"Global concerns remain quite significant," UBS Securities chief economic George Vasic said.
"It's worth remembering that you've got to keep an eye on the forest here, not just the trees ... the forest remains pivotal in shaping the overall outlook for equity markets."
Companies in the Toronto Stock Exchange's blue-chip S&P/TSX 60 index .TSE60 are expected to report fourth-quarter earnings growth of about 14 percent compared with last year, according to Thomson Reuters StarMine SmartEstimates. The index is trading at about 11 times 12-month forward earnings.
"Expectations are for quite strong growth in earnings," said CIBC senior economist Peter Buchanan. "We probably expect to see the market and earnings track each other going forwards."
The reporting season for Canadian blue chips kicks off with railway results, a key indicator of economic activity. Canadian National (CNR.TO) reports on Jan. 25 and Canadian Pacific (CP.TO) on Jan. 26.
Robust earnings are seen from the energy sector. Canadian Oil Sands COS_u.TO posts results on Jan. 27, followed by numbers from the country's biggest oil producer and refiner Suncor Energy Inc (SU.TO) on Feb. 2.
"Because you had a pick-up in the price of oil, the cash flow numbers from most of the major producers are going to look increasingly good," said Gorman. "This is an area where year-over-year comparisons are going to be particularly strong."
Cash flow is critical as it indicates an energy company's ability to fund development.
"We've got earnings going up 26 percent this year, led by materials and energy and about 10 percent in non-resources," said Vasic. "A great year in resource land and a respectable year outside that."
Material sector heavyweights reporting in the coming weeks include Barrick Gold (ABX.TO), the world's top gold miner, diversified miner Teck Resources TCKb.TO and the country's top uranium producer Cameco Corp (CCO.TO).
Despite all the focus on year-over-year earnings comparisons, Vasic advises investors not to be distracted and focus instead on corporate forecasts.
"People significantly overrate (year-over-year comparisons). When comps are easy you don't automatically say things are good," Vasic said.
"It doesn't really matter if they beat the quarter or miss the quarter. If they reaffirm their guidance, that's what effectively your outlook for the stock is determined on. And people really do not pay enough attention to that."
$1=$0.99 Canadian Editing by Jeffrey Hodgson and Rob Wilson