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Low Growth in Earnings Is Expected
06 Apr 2012 EDT - The New York Times
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The euro zone debt crisis, slowing growth in Asia and emerging markets, and commodity price inflation are also expected to have hurt performance, analysts said.

Analysts don’t expect the European debt crisis “to be fully dealt with in the first half of the year,” Ms. Short said. “There is too much uncertainty looming to say how it is going to affect corporate earnings.”

Part of the reason the numbers will show weakness is also smoke and mirrors: profits were starting to grow a year ago as the economy rebounded from the financial crisis, so comparisons to 2011 will be relatively mild.

“You still have growth, but it is at a slower pace,” said Lawrence Creatura, a portfolio manager at Federated Investors.

Three of the 10 sectors of the S.& P. 500 index — the industrial, technology and consumer staples companies — will show earnings growth in the first quarter of 2012, according to the forecast. The energy industry is expected to show flat earnings.

Of the other six, materials and telecommunications are expected to record the largest drops, partly because of shrinking global demand, according to Ms. Short.

Among the companies with lowered forecasts are the steel companies Nucor and Steel Dynamics. Nucor said on March 15 that it expected first-quarter results in a range of 30 to 35 cents a share, down from 50 cents in the same period in 2011.

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