Corporate America’s incredibly profitable pandemic

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companies are There’s going to be a big storm of quarterly profit and sales figures over the next few weeks, as the carnival of fourth-quarter corporate results begins.

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Running news: Big banks will open floodgates, releasing reports early Friday that mark the unofficial start of earnings season on Wall Street.

Why this matters: Earnings reports tell investors, analysts and economists how the economy translates into sales and profits for corporations. They also move stock – sometimes a lot.

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big picture: So far, corporate America has had a pretty good pandemic.

  • Although profits initially took a hit in 2020, they almost certainly hit record highs last year. (We won’t know for sure until the new batch of numbers, which cover the last three months of 2021, are included.)

state of play: You’ll sometimes hear executives arguing about recent inflationary trends like rising raw material prices, and rising wages, which could cut into profits.

  • It is true that the input cost keeps on increasing. A major measure of wholesale prices outside thursday – showed them about 10% as of November compared to the previous year.
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Bottom-line: Large companies have had no problem passing those costs on to consumers, which is why profit margins — that is, profits as a share of sales — are also at record highs.

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