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Financial Profits Wipe Out

Posted by: Ben Steverman on January 28, 2008

Wow, corporate profits are really looking terrible this earnings season.
A week ago, Reuters Estimates, calculating from a mix of actual results and analyst projections, was estimating earnings for the S&P 500 were set to fall 10.6% in the fourth quarter of 2007. That’s already the worst in years.
Today, after another week of results rolled in, Reuters Estimates now says we can expect corporate profits to fall 17.6%. Ouch.
What’s the problem? It isn’t health care or technology firms. Those firms are expected to increase earnings 12% and 26% respectively.
Rather, it’s a very familiar villain: The financial sector, where earnings are expected to drop 91%. In other words, nearly all profits from a year ago have been wiped out by the financial crisis.

Reader Comments

N. Walter Analyst/Researcher Zpryme Research & Consulting

January 30, 2008 2:50 PM

If each companies board of directors would eliminate compensations to CEO's who have been relieved due to poor performance then profits would have a better rebound.


March 5, 2009 6:22 PM

Considering where we are today, I'd rather know then what I know now. Stocks may have dropped but I just can't believe what I'm seeing today. Who knew this would be this way? It seems profits are tanking and businesses are falling off left and right. People's personal retirement funds have completely gone dry. It's very sad!

Save money and buy cheap checks online rather than paying more from banks.

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Bloomberg Businessweek’s Ben Steverman focuses on the latest moves in financial markets and emerging trends in stocks, bonds, and funds, always with an eye toward giving readers a better understanding of the sometimes confusing and often chaotic world of money. Standard & Poor’s senior index analyst Howard Silverblatt will also provide his take on companies’ finances and the markets. Voted one of the “Top 100 Finance Blogs” in 2007.

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