Profits postings point to US economic recovery

• Source: Global Times
• [23:26 July 22 2009]
• Comments

A wave of positive second-quarter results from leading companies seems to be fueling hopes for the long-awaited recovery of the US economy.

Thanks to strong sales of Macs and iPhones, Apple's quarterly profit blew past Wall Street forecasts and higher-than-expected gross margins, boosting its shares by four per-cent Tuesday.

Defying the global recession with a solid 13 percent jump in the fiscal third quarter, which ended June 27, Apple sold 2.6 million Macs, up four percent from a year ago, and 5.2 million iPhones in the third quarter, during which the company launched its third-generation iPhone 3GS and cut the price of the second-generation model to $99.

Global beverage giant Coca- Cola also reported Tuesday a net profit of $2.04 billion in the second quarter, up 43 percent from a year ago when heavy charges were taken.

On the same day, Yahoo reported second-quarter profits of $143 million, beating Wall Street expectations for the pioneering Internet firm.

Caterpillar issued a more optimistic outlook and unveiled profits exceeding analysts' highest estimates, sending shares of the world's biggest maker of construction equipment rising nearly 8 percent Tuesday.

Despite drops in second-quarter profits, chemical group DuPont and drug maker Merck both had earnings exceeding Wall Street's forecasts.

Positive results from manufacturers, the usual bellwether of the US economy, fuel hopes that the global industrial economy was recovering.

Global stock markets have enjoyed a rebound recently on signs of an improvement in the US economy and corporate earnings.

Investors were closely watching stock markets and any clues on the outlook for major economies, said Marito Ueda, a currency dealer at FX Prime.

Federal Reserve chairman Ben Bernanke, delivering his semi-annual economic report to Congress Tuesday, cited “notable improvements” in the US economy and a somewhat brighter economic outlook.

“In light of the substantial economic slack and limited inflation pressures, monetary policy remains focused on fostering economic recovery,” he said.

Meanwhile, worries still remain due to heavy reliance on overseas markets of some corporations.

While reporting strong volume growth in emerging markets like China and India, Coca-Cola warned that US consumers remained under pressure. The factor is underlined by steep revenue falls at three airlines: United, Continental and Southwest.

Agencies