Corporate Profits Aren't What They Seem - Wall Street Examiner Forums and Bears Chat

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#1 WorkingPoor

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Interests:I'm a Canadian living the simple life in Mexico. Instead of Sleepless in Seattle, I am Stuffless in Mexico. Oh, and I have been posting on bearish forums since 2000. I have been here before as CivilBear and PoorSoul.

Posted 10 February 2012 - 06:47 AM

NEW YORK (AP) — Is the great profit engine of corporate America running out of steam?

While other parts of the economy struggled the past two years, large companies managed to rack up higher profits quarter after quarter. Now reality is catching up with big business.

As companies close their books on the final three months of last year, the big ones that make up the Standard & Poor's 500 stock index appear likely to earn about $230 billion. That would be $12.6 billion more than a year earlier.

But the increase, 5.8 percent, is less than half the speed at which quarterly profits grew the first nine months of 2011. In the average quarter since the beginning of 2010, earnings have grown five times as fast.

Analysts expect profit growth to accelerate later this year. But so far, almost all the growth comes from two companies, one of them among America's most favorite, the other among its most hated — Apple and the bailed-out insurance company AIG.

Take away those two companies and profits for the remaining 498 are expected to grow a measly 1.1 percent, according to FactSet, a provider of financial data.

http://www.chron.com...eem-3079696.php