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MarketBeat – Charts of the Day: Beware if Earnings History Repeats
As if there weren’t enough warning signs flashing from earnings season, the always thoughtful John Mauldin offers a one-word assessment of the future for corporate profits: Beware. “Currently, profit margins are cyclically high, near historical highs, and already at unsustainable levels, with projected further increases over the next two years,” Mauldin, president of Millennium Wave Securities, wrote in his weekend newsletter. “Beware.” More than 4/5 of S&P 500 companies have reported earnings for the latest reporting period. About 67% of those companies have reported earnings above analyst expectations, which is higher than normal, according to Thomson Reuters. But only 41% of companies have posted revenue above analyst expectations, which is well below normal levels. That has raised concerns that the slowing economy and Europe’s debt crisis is hindering growth for U.S. companies.
Source: Bianco Research
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