Gretchen Morgenson, whom I respect, writes 
on 2004 Feb 01
http://www.nytimes.com/2004/02/01/business/yourmoney/01watch.html
Her high-quality earnings company list is:

American Express
Comerica
Forest Laboratories
Target
Sysco
Automatic Data Proc.
Family Dollar Stores
Johnson & Johnson

The low quality earnings list apparently would include:

Texas Instruments
eBay
Ball Corporation, maker of metal and plastic packaging; 
Safeco, the property and casualty insurer; 
Symantec, a provider of Internet security technology; 
Unisys, the information technology concern; 
Whirlpool, the appliance maker.
Varizon


On on 2004 Feb 01, Knight Kiplinger says:
"...stick with funds like 
Oakmark Equity and Income, 
Meridian Growth, 
CGM Focus or 
others that are consistently strong performers."

"Shun mutual funds that do not limit the amount of money they will accept."
"Mutual funds are the one smart way to invest overseas.'' 
================================
 
In searching for more by David Bianco, 
the person whose work Gretchen M. references, 
I found that this whole issue had been visited twice or more in 2003.


http://forums.transnationale.org/viewtopic.php?t=3070&view=previous
Source / title: Earnings Are Worse Without the Icing
Date: Wed Aug 06, 2003 6:37 pm  

CORPORATE earnings ............

David Bianco, accounting analyst at UBS in New York, said: "The quality of earnings for the S.& P. 500, from an accounting standpoint, is the worst it has been in more than a decade." And he has done the work to prove it.

The slide is largely the result of aggressive accounting practices in three areas, he said. 

First are so-called special charges, which companies say are one-time events from re-structurings or asset impairments, but which may actually include recurring operational costs that should be deducted from revenue. 

Second is the choice many companies have made not to subtract the costs of stock options from their results, and 

finally, there are those rosy pension assumptions - inflating pension earnings or masking pension costs - that improve corporate earnings.

............ What he found was that in 1991, the adjusted earnings were roughly 18 percent less than those the companies reported to shareholders: $15.91 a share versus $19.50 a share.

Shifting to 2002, the difference grows vast: earnings adjusted for the funny stuff were 41 percent less than the profits reported to investors.

So while investors may have thought that they were paying roughly 19 times the earnings of S.& P. companies .... they were really paying almost 25 times...

At individual companies the numbers become even more troubling. 

Texas Instruments, which analysts expect to earn roughly 35 cents a share this year, would earn 10 cents a share if Mr. Bianco's adjustments were made. That increases its price-earnings ratio from 54 to 188, based on Friday's close. 

And at eBay, Mr. Bianco figures that while analysts forecast its profit at $1.46 a share, the figure would drop to 57 cents this year if adjusted by his method. That ramps up eBay's price-earnings ratio from 77 to 198.

............

In other words, the great stock market bubble lives on.
(The New York Times July 13, 2003)