Corporate profits highest since 1993, projected to keep soaring

Posted on: March 17th, 2011 by Kyle Daly No Comments

Bloomberg News reports that despite the continued effects of the recession felt by many Americans (unemployment levels, for example, still hover near 9 percent), corporations are posting some of their highest profits in decades.

Although financial indices have slumped recently because of the tsunami in Japan and a trade downturn, the S&P 500 has trended massively upward, and corporations have seen record earnings since the start of the recession.

The announcement is good news for investors, as Bloomberg reports that the cuts to shareholder dividends that many corporations enacted as the economy entered free-fall have resulted in massive cash reserves. Investors will start to see some of that money in the coming year, Bloomberg projects, with 378 of the 380 S&P companies that pay dividends to shareholders forecasted to restore dividend payouts to pre-recession levels. American corporations now have a record stockpile of $937 billion in cash reserves.

Bloomberg does report at least one aspect of the corporate financial boom that could have positive repercussions for those who don’t have extensive investments. Oil prices are projected to return to $99 a barrel in New York in coming months, a benchmark that was passed as a result of Mideast unrest — though, even after adjusting for inflation, $99 is still a level that had not been seen in American history until recent months.

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