What explains the robust picture? The gusher of earnings in the oil patch turbo-charged profits overall, as did Corporate America's endless penchant for controlling costs. But CEOs' renewed confidence in the economy's strength also played a big role. With big wads of cash on their balance sheets, many CEOs are putting that money to work -- reinvesting in infrastructure and rebuilding inventories. "People have been finally willing to place bets," says Diane Swonk, chief economist of Chicago's Mesirow Financial. "That means investing in your company's future."
That investment is boosting a range of sectors -- from technology to transportation to materials. Microsoft Corp. (MSFT
) and Oracle fared especially well, as chief information officers opened their wallets. Shipping firms also benefited from a pickup in demand. FedEx Corp. reported sales of $7.3 billion, compared with $5.9 billion for the same period in 2003. For a look at how various companies are performing -- from the S&P 500 and the broader corporate world -- see the accompanying table.
What's ahead? Thomson First Call estimates that profit gains may slip to 6.8% in the first quarter of 2005, in part because growth has been so strong over the past year and comparisons will be tougher going forward. But U.S. companies should continue to chug ahead. By Adrienne Carter in Chicago