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Earnings in sentence

640 examples of Earnings in a sentence

Fundamentalists claim that faster year-on-year growth in US average hourly earnings was the immediate trigger for the crash.
And, if this were to persist and spread, even the US – a relatively healthy economy – could be forced to revise downward its expectations for economic growth and corporate earnings.
Exporters could exchange 30% of their earnings at the market rate.
This was subsequently replaced with a two-tier exchange-rate system making the rupee partially convertible--60% of export earnings could be converted at the market exchange rate, and the rest at the RBI's fixed rate (used by the government to finance essential imports like petroleum, cooking oil, fertilizers, and life-saving drugs).
But that is slow in coming; in the meantime, the Japanese financial market furiously adjusts to the rising Yen by doing exactly the wrong thing: they sell off dollar assets, dump dollar earnings to move their balance sheets and income flows into Yen.
They are sick and tired of loosingmoney on their dollar earnings and assets.
The irony here – not lost on the major banks’ finance directors – is that as fast as banks add capital from rights issues and retained earnings to meet the demands of prudential regulators, the funds are drained away by conduct regulators.
But extensive empirical research confirms that at the macro level, business investment depends primarily on expected future demand and output growth, not on current returns or retained earnings.
In addition, as Fink and others have warned, compensation practices that link top executives’ pay to measures of short-term success like quarterly earnings per share or annual equity performance also encourage “short-termism” in corporate investment decisions.
In the United States, the average earnings premium received by those with four-year college degrees over those with no college has gone from 30% to 90% over the past three decades, as the economy’s skill requirements have outstripped the educational system’s ability to meet them.
Indeed, remittances account for a significant share of GDP in many developing countries, and are often the largest source of foreign-currency earnings.
The question is whether stock valuations are excessive relative to future earnings potential.
The answer depends on two key variables: the discount rate and future earnings growth.
A lower discount rate and/or a higher rate of expected earnings growth would justify higher equity valuations.
The Shiller P/E ratio – based on average real (inflation-adjusted) earnings from the last ten years – is at 27.08, with a mean and median of 16.59 and 15.96, respectively.
And, in February, the forward 12-month earnings P/E ratio, which uses managers’ future earnings guidance, reached an 11-year high of 17.1, with the five- and ten-year averages standing at about 14 and the 15-year average at 16.
According to the standard formulation, stock prices tend to revert toward the present value of estimated future earnings (including growth in those earnings), discounted at the so-called “risk-free rate,” augmented by an equity risk premium.
More precisely, the forward earnings yield – that is, the inverse of the P/E ratio – is equal to the risk-free rate plus the equity premium, minus the growth rate of earnings.
In either case, equity prices should level off at some point, allowing earnings to catch up, or even correct downward.
A key factor is earnings growth.
Earnings can grow faster than revenues for a prolonged (though not indefinite) period, if companies cut costs or reduce investment – a trend that would, over time, lower depreciation charges.
Furthermore, the economy’s equilibrium conditions could change, so that aggregate earnings would capture a larger share of national income.
That said, some trends may be having the opposite effect on expectations for earnings growth.
More than two-fifths of the S&P 500’s earnings come from external markets, some of which, like Europe and Japan, are barely growing, while others, like China, are slowing.
The appreciation of the dollar exacerbates the situation for US markets, because it creates headwinds for exporters and causes companies’ foreign earnings, reported in dollars, to decline.
While expectations of faster earnings growth may well be contributing to elevated P/E levels, the current situation is complicated, to say the least.
What is certain is that expectations of high earnings growth would have a more durable positive effect on P/E levels than the suppression of the equity risk premium.
In my view, it is difficult to make a strong case for a significant sustained increase in earnings growth in this environment, meaning that growth alone would not justify current equity valuations.
Still, Hong’s formula is simple, and it starts to bite when earnings get really big.
Countries whose terms of trade improve also tend to grow faster and undergo real exchange-rate appreciation as domestic spending of their increased export earnings expands the economy and makes dollars relatively more abundant (and thus cheaper).
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