The latest earnings season showed that U.S. companies are making huge profits, but in many cases it’s not because they’re selling more products. A growing number are shoring up the bottom line by cutting spending as inflation has slowed. In the third quarter, the difference between the number of companies that beat earnings per share estimates and those that beat revenue estimates was the biggest in almost a decade. This could be a threat to the stock market and the economy. I’ll explain.
0:00 Companies reporting higher profits but lower revenues
0:31 How we know this is happening
1:55 Why it’s unusual
2:22 Why it may be bad for the economy
I’m Dion Rabouin, a WSJ reporter covering markets and the economy. I’ll be diving into all things finance, from the popular and well-known — like crypto and stocks — to the complex and intricate — like leveraged loans, derivatives and private equity. Subscribe to join me as I take a deep dive into what’s making money move and why it matters.
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