Corporate earnings keep falling, but there are signs of life
Earnings at big companies are on track to tumble 6.4 percent in the first quarter, the worst since the financial crisis.
Much of the blame lies in plunging oil prices and a sagging global economy.
The beleaguered energy sector, which includes giants like Exxon Mobil and Chevron, is expected to report an overall loss, according to S&P Global Market Intelligence, something that hasn’t happened since the firm began collecting data in 1999.
When revenue comes from goods those companies sell overseas, be it mining equipment, medicines or appliances, it is worth less in dollars once the profits are converted back to U.S. currency.
Chemicals maker DuPont and the giant health care company Johnson & Johnson also issued higher forecasts.
According to Jeremy Zirin, chief equity strategist at UBS Wealth Management Americas, makers of machinery and consumer companies are doing especially well, a good sign for the overall health of the U.S. economy.
[...] it’s also because energy prices seem to be recovering and there are hopes that the U.S. economy will continue to grow even if the rest of the world isn’t as strong.
S&P Global Market Intelligence says analysts think overall profit growth will eke out a gain of 0.1 percent for the full year.