Analysts believe blue chips such as Commonwealth Bank (ASX:CBA), Qantas (ASX:QAN) and Telstra (ASX:TLS) will meet market expectations when they announce annual earnings this week, says a newspaper.

According to The Australian, the focus will instead be on next year's outlook, with 2011 earnings predicted to be reduced.

"Financial year 2011 expectations should drift back a few per cent across the board," UBS strategist David Cassidy said.

"Revenue assumptions don't look too onerous, but the amount of margin expansion forecast for FY11 looks a little ambitious.

"While results should be generally subdued and FY11 estimates should drift lower, expectations embedded in market pricing are very conservative."

Citi equity strategist Richard Schellbach said "favourable profitability conditions appear to have peaked, pointing to likely warnings from companies on the operating outlook for 2011".

RBS strategist Greg Goodsall foresees the current reporting season, which kicked off last week with very strong numbers from Rio Tinto, to be positive. "This should give a fillip to the market," he said.

With solid balance sheets common, the emphasis would be on what firms intend to do with their cash. "Will there be increased dividends, buybacks or acquisitions?" Mr Goodsall said.

UBS predicts Commonwealth Bank will deliver cash net profit after tax of $6.07bn when it declares full-year results on Wednesday.