Many investors are increasingly convinced that the worst of the recession is behind us. Although optimism about future growthhas pushed share prices up fairly dramatically since earlier this year, it's taken awhile for that optimism to translate into higher expectations for company earnings.

Slow on the uptake
That delayed reaction is nothing new for growth stocks. When the recession first hit, many high-growth companies didn't immediately face up to the prospects of falling earnings and revenue growth rates. Given the way their stocks had performed throughout the previous bull market, investors hoped that those companies would stay resilient and buck the trend with sustained growth. As a result, it was easy to stay in a state of denial about just how bad the market meltdown would be -- at least until companies started reporting actual resultsthat shellshocked shareholders simply couldn't ignore.

Similarly, after the market's lows in March, investors weren't necessarily in any hurry to think about an earnings recovery, even as share prices started to rebound quickly. Having gotten burned by companies that didn't hold up as well during the recession as they had hoped, investors were conservative in their expectations.

Now that many companies have reported a couple of quarters of decent results, however, analysts are finally getting around to marking up their guesses on future earnings. Just take a look at how much forward estimates for some companies have risen in just the past 90 days:

Stock

Forward EPS Estimate 90 Days Ago

Current Forward EPS Estimate

Change

Priceline.com (Nasdaq: PCLN)

7.43

8.97

20.7%

Apple (Nasdaq: AAPL)

7.88

9.35

18.7%

Google (Nasdaq: GOOG)

24.59

26.29

6.9%

Intel (Nasdaq: INTC)

1.10

1.46

32.7%

Baidu (Nasdaq: BIDU)

8.38

9.28

10.7%

BHP Billiton (NYSE: BHP)

2.96

4.02

35.8%

Ebix (Nasdaq: EBIX)

3.16

3.63

14.9%

Source: Yahoo! Finance. Forward estimates are for the next fiscal year.

In most of these cases, rising estimates are only putting these companies' profits back in line with their longer-term expected trends. Notice how their expected near-term earnings growth now compares with five-year estimates:

Stock

Expected Earnings Growth This Year

Expected Earnings Growth Next Year

Expected 5-Year Earnings Growth

Priceline.com

25%

19.8%

18%

Apple Continued...