Tuesday, March 18, 2014

Profits on the Up

One of the factors that has fueled the long bull market in stocks has been the increasing growth in corporate profits. The earnings reports for the S&P 500 are virtually all in for the fourth quarter of 2013, and the numbers are record-setting: Corporate profit margins reached a whopping 9.8 percent for the quarter, according to FactSet.

Records for profit margins date back to 1994, and over that time span, the current figure would be a new record. Given the way corporate profit margins have been in recent decades, it is also likely an all-time high. The average profit margin since records have been kept is 7.5 percent.

Could that number go even higher? FactSet has analyzed revenue and income forecasts for the coming year, and their estimate is that profit margins could top the 10 percent milestone sometime this summer.

No comments:

Post a Comment