Don't Celebrate Yet: Earnings Are Up, but Not Sales
Though first-quarter profit beat expectations, a growth story is absent
By Clay Dillow,  Newser Staff
Posted May 11, 2009 12:05 PM CDT
Traders and specialists work the trading floor of the New York Stock Exchange Monday, March 16, 2009.   (AP Photo/David Karp)
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(Newser) – The fact that 66% of American companies beat their first-quarter earnings expectations is good, writes Henry Blodget in Clusterstock, but not as good as it looks. A closer examination of the data shows that while profits increased, revenues did not, and “you can’t fire your way to prosperity.” Earnings show companies adjusting to recession—not pulling out of it. “Until companies start surprising on revenue, all this particular ‘green shoot’ shows is that companies are reacting quickly to the recession.”