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Saturday, July 25, 2009

Economy Stays Sluggish

Revenue at 143 companies in the S&P 500 reporting this week, many of them bellwethers for the American economy, fell on average 10 percent from a year ago, according to Bloomberg data. Seventy managed to top the analysts’ consensus for sales, while 107 did so for earnings per share.

The economy probably declined 1.5 percent in the three months ended June 30, marking the fourth straight drop and the longest such streak since quarterly records started in 1947, according to the median of 66 economists in a Bloomberg survey.

“The real theme is the divergence between earnings and revenues,” said Steven Ricchiuto, chief economist at Mizuho Securities USA Inc. in New York. “We know companies are cutting costs at a record pace, and that is helping earnings. But you can’t keep on shrinking your way to profitability. Eventually, you do damage to your end users. You have to get revenues up to have a sustainable upturn.”

Industrials led the sectors in earnings surprises, with 19 of 23 firms that reported during the week posting profit higher than analysts projected.

Caterpillar, the world’s largest maker of bulldozers, reported 72 cents in per-share earnings excluding some costs, more than triple the average estimate of 22 cents. It also raised its full-year forecast, saying stimulus programs are starting to support global demand.
- Bloomberg

Not a good news for us, .. It shows that economy not stabil but we as a bizman must go on ..
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