American corporate profits appear to be “running out of steam”, says Buttonwood in The Economist. They had recovered after the crisis and are close to a post-war record as a proportion of GDP.
But first-quarter S&P 500 earnings estimates were revised down by more than 4% between January and March, and profit warnings have been unusually plentiful.
Remove the effect of one-off items, such as a big write-downs the year before, and you will see that year-on-year profit growth is falling, according to Morgan Stanley Capital International. And a quick rebound looks unlikely.
While revenue growth has been gradual [...]
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