In today’s (August 14,2013) Wall Street Journal, an article titled “Shrinking Profits May Keep Stocks’ Records Safe” discusses quarter-to-date S&P500 earnings.
Notable excerpts include:
With 90% of companies in the S&P 500 having reported second-quarter results, firms are on track to post 2.2% earnings growth from the year-ago quarter. That is the second-lowest growth rate since the depths of the financial crisis, and down from previous periods. Earnings among the large U.S. companies tracked by the index rose 3.4% in the first quarter and 5.6% in the fourth quarter of 2012.
And the gains from earlier this year have been driven largely by corporate cost cutting and a bounceback by financial companies. Excluding financials, profits are on track to be down 2.9% in the second quarter from last year, according to FactSet.
Meanwhile, stock analysts have been cutting profit forecasts for the second half of the year. Wall Street now expects 4% earnings growth for the third quarter, down from 6.6% forecast at the end of June.
There is also a notable graphic in the article that shows the sales and earnings growth for the S&P500 since 2008, with a narrative stating “Growth at S&P 500 companies has trailed off, leading analysts to trim sales and profit expectations.”
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