Powering Through the Slowdown
Despite a weakening economy, top-quality stocks are reporting robust profit gains
(MONEY Magazine) – Forecasters were surprised when third-quarter economic growth came in at a weak 1.6%. But so far, at least, corporate profits aren't suffering.
The most recent earnings for the S&P 500 are up more than 12% from a year ago. And a surprising number of companies are reporting profits that exceeded Wall Street's expectations, according to Zacks Investment Research.
Among Sivy 70 stocks, standouts include Texas Instruments, with a 25% gain in earnings per share. The stock is cheap, and the chipmaker's long-term prospects are stellar (see page 112).
Another winner was Burlington Northern, with earnings up 22%. Business at the leading railroad was strong across the board. Revenue from coal hauling, in particular, rose 20%. Burlington is a major transporter of low-sulfur coal from Wyoming's Powder River Basin.
In October, five of the Sivy 70 rose more than 10%; none dropped that much. The winners: Comcast, IBM, Johnson Con-trols, Limited Brands and Merrill Lynch.
Read editor-at-large Michael Sivy online every Tuesday at cnnmoney.com/sivy.
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