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Corporate Profits

Dec 05 2020

A Great Profit Quarter Was “In The Bag”

  • Dec 5, 2020

Economists marveled at the rebound in third-quarter NIPA corporate profits to new all-time highs, but it’s just “bean bag” economics from more than a century ago.

Jan 08 2020

Are Earnings Set To “Gap” Higher?

  • Jan 8, 2020

We are troubled that the bullish optimism has spilled over into the 2020 estimates for S&P 500 earnings. Zero growth in 2020 is probably not a bad guess for NIPA figures, but S&P numbers don’t always follow suit.

Jan 08 2020

It’s Not What They Borrowed, But How They Used It

  • Jan 8, 2020

Following the deflationary bust of 2007-2009, the last decade was expected to be one of deleveraging. Only U.S. consumers appeared to get that memo, however.

Jun 07 2019

Profits Have Peaked

  • Jun 7, 2019

With the S&P 500 EPS count steadily shrinking and managers getting ever more creative with “adjusted EPS,” corporate profits measured with standardized accounting rules merit a closer look.

May 31 2019

An Economy This Healthy Is Hostile To Profits

  • May 31, 2019

It’s hard to grow profits when an economy’s resources are already fully employed, a fact we highlighted when the U.S. Output Gap turned positive several quarters ago. Therefore, the first quarter drop in NIPA corporate profits, reported yesterday, shouldn’t have come as a surprise.

 

Apr 12 2019

Margins Prove Capitalism Still Works

  • Apr 12, 2019

Corporate profits were outstanding last year, but even the benefit of a 40% cut in the top income-tax rate wasn’t enough to lift the net profit margin back to the all-time high of 10.6% established in early 2012. Still, the latest 10.0% figure is more than a percentage point above the 2007 cycle high and about two points better than any other cycle high.