Companies reporting huge profits should use them wisely

Minting cash in a pandemic is not good PR, says Matthew Lynn. Companies should reinvest it for the future.

Oil workers
A profits gusher: not a good look
(Image credit: © Susana Gonzalez/Bloomberg via Getty Image)

This will be a big year for corporate profits. Last week Apple, Microsoft and Google-owner Alphabet reported combined quarterly profits of more than $50bn. Amazon chipped in with another $7bn for the quarter. At Barclays, profits quadrupled and the dividend was up; HSBC this week also reported a strong increase in earnings. And all the main mining companies are minting money as commodity prices recover, as are the oil majors. In the second quarter of this year UK dividends rose by a remarkable 51% and right now they show little sign of slowing down. Investors were expecting companies to make lots of money as they recovered from the pandemic – and they have been proved spectacularly right.

Don’t provoke more anger

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Matthew Lynn

Matthew Lynn is a columnist for Bloomberg, and writes weekly commentary syndicated in papers such as the Daily Telegraph, Die Welt, the Sydney Morning Herald, the South China Morning Post and the Miami Herald. He is also an associate editor of Spectator Business, and a regular contributor to The Spectator. Before that, he worked for the business section of the Sunday Times for ten years. 

He has written books on finance and financial topics, including Bust: Greece, The Euro and The Sovereign Debt Crisis and The Long Depression: The Slump of 2008 to 2031. Matthew is also the author of the Death Force series of military thrillers and the founder of Lume Books, an independent publisher.