Economy

xchrom

(108,903 posts)

23. UH-OH: Corporate America Is Finally Getting Nervous About Record-High Profit Margins

Wed Feb 12, 2014, 09:14 AM

Feb 2014

http://www.businessinsider.com/goldman-margin-expansion-difficult-in-2014-2014-2

Corporate America has managed to deliver sky-high profits on little revenue growth thanks to expanding profit margins.
Cheap debt, low tax rates, and increased productivity have fattened profit margins to record levels.

While managers believe margins can move higher this year, their conviction behind that call seems increasingly shaky.

"Companies once again presented mixed outlooks for margins, but many indicated that expansion will be difficult," said Goldman Sachs's David Kostin citing earnings conference calls. "Consistent with our forecast that profit margins will remain roughly flat near historical peak levels for the next two years, managements highlighted difficult pricing and higher input costs as key factors offsetting operating leverage, efficiency gains, and continued cost controls."

Read more: http://www.businessinsider.com/goldman-margin-expansion-difficult-in-2014-2014-2#ixzz2t75Jy8iK

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