Tuesday, January 11, 2005
![]()
NEW YORK — As the U.S. earnings season begins in earnest and investors get their first look this year at the health of corporate America, some early signs confirm fears of a slowdown in profits growth.
Alcoa Inc. (), the world's biggest aluminum producer, and biotechnology company Genentech Inc. on Monday reported lower-than-expected fourth-quarter earnings.
The same day, chip maker Advanced Micro Devices Inc. () warned that its fourth-quarter revenue would fall below Wall Street's expectations.
Analysts have warned that higher costs for companies in raw materials, energy and wages, coupled with higher interest rates, could slow profit growth further in 2005.
Also, pre-announcements from companies in the technology and consumer cyclical sectors have cited decreased demand, pricing pressures and increased inventories as the primary reasons for their lowered outlooks.
While fourth-quarter 2004 earnings overall are expected to grow 15.5 percent year-over-year for companies in the Standard & Poor's 500 index (), most sectors in the index will lag that rate of profit growth considerably, according to Reuters Estimates.
For the whole of 2005, Reuters Estimates expects earnings growth of 10.6 percent, about half the rate it estimates for 2004.



Reply With Quote

Bookmarks