Even after allowing for the weaker profit reports expected in coming weeks from utilities, the consensus among Wall Street analysts is for a 6.7% rise in second-quarter operating income for the companies in the Standard & Poor's 500-stock index, according to Thomson First Call. That is nearly a full point higher than forecasts in early June. And BusinessWeek's flash report from 120 early-filing companies shows that income from continuing operations, after excluding special charges, was up 18% compared with the previous year.
With business demand still weak, however -- revenues for the 120 companies in the BusinessWeek survey rose only 3% -- most businesses earned their profits through aggressive cost-cutting. But that should give companies even more leverage if the economy surges this fall as forecast. Analysts polled by Thomson First Call now expect profits for companies in the S&P 500 to climb 13.6% in the third quarter and 21.5% in the fourth quarter. Having already dealt with SARS and war, Corporate America has beat the odds before. By Brian Grow in Ocala, Fla.