(Refiles to correct date in dateline)

* Data points to bottoming of earnings - analyst

* Q1 outstrips Q4 as bank earnings stabilize

* Q1 earnings down 36 pct annually

* AIG results could push average earnings lower

By Edward Krudy

NEW YORK, April 23 (Reuters) - U.S. corporate earnings are shaping up to be better than expected in the first quarter, compared with the previous quarter as bank results stabilize. But profitability remains well below pre-recession levels.

Forecasts for the second and third quarters show a steady improvement in earnings before analysts see a return to positive growth, hand in hand with an economic recovery, in the last quarter of 2009.

With around a quarter of S&P 500 companies having reported so far, data shows an average annual decline of 36 percent in first-quarter earnings, compared with a 67 percent drop in fourth-quarter profits, according to the Thomson Reuters' Director's Report.