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  • Daily Earnings Surprise Summary: EPS Mostly Up, Sales Mostly Down [View article]
    On Jun 27 10:15 AM John Lounsbury wrote:

    > JC - - -
    >
    > Good research. The implication is that earnings are improving through
    > cost cutting rather than sales increases. This has limits. While
    > there may be a large increases in earnings from increasing sales
    > continuing over long periods of time, there are limits to how much
    > cost cutting can be done over time.
    >
    > Sales improvements must start soon to support future earnings improvements.
    > Cost cutting beyond a certain point will further reduce future sales.

    John, good comment. I get worried about the aftermath of all that. Once "cutting to the bone" is done, when things do pick up again, we now encounter the problem of execution. That *may* cause a lot of earnings misses when orders roll in, analysts raise estimates and inefficiencies cause lower bottom line results for a quarter or two.

    HardToLove
    Jun 27 16:48 pm |Rating: +1 0 |Link to Comment
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