Broking house First NZ Capital says more than half the listed companies it tracks released mediocre or poor results in the June year.
In an earnings wrap for the 2008 financial year, it says of 25 companies and property trusts, only 10 of the results are excellent.
Overall earnings growth was around 8% for the full year.
The director of economics and strategy at First NZ Capital Jason Wong, says First NZ Capital has made issued 21 downgrades and only 6 upgrades in the last two months, indicating that it is a tough environment in which to grow earnings.
However he says there is some hope ahead, despite a soft economy, as many companies have major restructuring programmes underway, which are already delivering cost savings.
Mr Wong predicts GDP growth will be lower over the next 12 months compared to the past year, with oil prices likely to be higher.