November 12, 2017

HOW COULD REDUCING LABOR COSTS NOT PRODUCE PROFITS?:

Companies Are Making Bigger Profits Than Expected (Stan Choe, 11/12/17, AP)

Corporate profits keep chugging along.

Companies have lined up in recent weeks to tell investors that they earned more during the summer than Wall Street had forecast, and the big numbers offer some reassurance for the market's skeptics.

Stock prices tend to track corporate profits over the long term, so the better-than-expected growth helps to validate the stock market's record-setting run, at least somewhat. Still, this earnings season also includes some signs the eight-plus-year rally is nearer the finish than the start.

Coming into this earnings reporting season, many analysts were forecasting a dud. Insurers forced to make big payout for hurricane damage would drag earnings sharply lower for the financial sector. Lower commodity prices would pull down profits for raw-material producers.

Just ahead of earnings season, analysts were penciling in only 3.2 percent growth in earnings per share for companies in the S&P 500. Those same companies produced a robust 11 percent growth in earnings per share in the spring.

Posted by at November 12, 2017 5:57 PM

  

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