Confounding the conventional financial wisdom that corporate earnings will decline about 5% this year, a majority of CFOs in U.S. firms anticipate 1999 earnings will be better than 1998's. Executives in the largest firms, companies with annual sales ...
Confounding the conventional financial wisdom that corporate earnings will decline about 5% this year, a majority of CFOs in U.S. firms anticipate 1999 earnings will be better than 1998's. Executives in the largest firms, companies with annual sales greater than $5 billion, expect earnings to increase 6%; those in midsize companies expect a 13% gain; and those in the smallest firms are figuring on a nearly 20% rise, reveals the most recent Financial Executives Institute/Duke University Corporate Outlook Survey. Most CFOs expect that earnings will pick up after a slow start. While 58% of the companies surveyed expect an earnings increase in 1999, only 7.4% anticipate they'll report earnings increases for the year's first quarter. "It is notable that 58% of the firms expect earnings to increase in 1999, because only 15% expect sales revenue to increase," says John Graham, a Duke finance professor and director of the survey. "This indicates that many firms will wring their increases from cost-cutting programs."
