Consensus earnings estimates in early 2009 are just about worthless. After one of history’s worst market crashes and amid a serious recession, nobody really knows at this point what corporate earnings will be this year.

In the U.S., the news reports layoffs, project cancellations and divestitures — in between announcements of lower sales and earnings projections. If you try to estimate earnings, you have a fast-moving target; what you believed about a company or industry last week may no longer be true this week.

As a result, preliminary estimates for U.S. corporate earnings look high — very high. For example, Ross Healy, president of Toronto-based market analysis firm Strategic Analysis Corp., says these estimates are likely to be missed by a wide margin.

Not until companies report first-quarter results will we get a better fix on the U.S. economy. This is a good three or four months away. In the meantime, you should ignore the analysts’ consensus and revert to basic, conservative methods of estimating corporate earning power.

One method is to apply a company’s lowest return on equity in the past 10 years to its current shareholders’ equity. This will produce what might normally be a worst-case earnings estimate.

Another method — used in the study shown in the accompanying table — is to use long-term (seven years) average earnings per share as a baseline for company earnings in 2009. This applies one of the oldest and most conservative approaches to evaluating stocks. The assumption is that a company should do as well in the future as it has done, on average, in the past.

As 2008 has just ended and quarterly earnings’ results are just being reported, two overlapping seven-year averages are shown in the table — 2001 to 2007, and 2002 to 2008. The latter employs estimated 2008 earnings, benefiting from nine-month results already reported.

The results show most earnings estimates are well above average earning power, even assuming the U.S. industry will be able to match its past average earnings this year.

The table is arranged by the 10 global industry classification system sectors, with each S&P 500 composite sector subindex heading a section. Companies shown are the largest-capitalization companies in the S&P 500.

Take the industrials sector. As the table shows, this sector earned an average of $13.89 in the seven years from 2001 to 2007. If you move that seven-year period ahead to 2002 to 2008 (using estimated final 2008 earnings), average earnings per share were $15.74.

The estimate for 2009 is $20.54, which is 48% and 31% higher than average earnings for the 2001-07 and 2002-2008 periods, respectively. Those are huge margins, considering the U.S. economy is in a recession with no hint of recovery.

Only in the desperately wounded financial services sector and the recession-slammed consumer discretionary sector do analysts expect most firms to report earnings this year of less than the seven-year averages.

You can certainly pick out reasons for some of the expectations of high earnings gains this year. For instance, Denver-based Newmont Mining Corp. reflects belief in a strong gold industry. And Bethesda, Md.-based Lockheed Martin Corp. enjoys a place in the recession-resistant defence industry.

But the scale of the expected general improvement over average earnings looks far too great in light of the direction of the U.S. economy.

Typically, projected price/earnings multiples appear low. For instance, the energy sector subindex traded at 15 and 12 times average seven-year earnings for the 2001-07 and 2002-08 periods, respectively, but estimates are for only eight times 2009 earnings. That’s because the 2009 earnings estimates are 84% and 49%, respectively, higher than average earnings for the 2001-07 and 2002-08 periods — despite the recent collapse of oil prices. IE