U.S. companies are preparing to report their first-quarter earnings, with experts predicting the biggest drop in profits since the beginning of the pandemic, according to the Associated Press.
The AP also reports that analysts expect a 6.6% decline in earnings per share compared to a year earlier, making it the sharpest drop in three years and a second consecutive quarter of profit decline for the S&P 500.
The profit decline is attributed to high inflation, a struggling manufacturing sector, and indications of an economic slowdown. Experts refer to this as the “profits recession,” yet remain hopeful that profits will recover later in the year.
However, skeptics worry that such forecasts are overly optimistic and don’t account for the damage caused by the recent banking industry crisis.
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