Reply #10: Profits Top Forecasts as Apple, LG Chem Wring Out More Savings [View All]

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http://www.businessweek.com/news/2011-04-24/profits-top-forecasts-as-apple-lg-chem-wring-out-more-savings.html

April 25 (Bloomberg) -- First-quarter earnings have beaten forecasts so far, as companies from Apple Inc. to Novartis AG and LG Chem Ltd. wring more profit from operations worldwide and an economic pickup buoys sales.

Since April 11, 71 percent of MCSI World Index members reporting results have topped analysts’ estimates for earnings per share, according to data compiled by Bloomberg. Profits of the 188 companies have beaten forecasts by 8.8 percent.

Companies are exceeding estimates by using productivity measures to get more out of workers and factories. Novartis is cutting purchasing costs by as much as 8 percent a year, helping the Basel, Switzerland-based drugmaker top analysts’ first- quarter estimates last week. Seoul-based LG Chem is boosting petrochemical profit margins as demand rises after the March 11 earthquake in Japan disrupted rivals’ operations.

“Productivity has been terrific -- it really has been an unsung story,” said Jeffrey Schappe, chief investment officer of Sterling Capital Management LLC, which oversees about $32 billion in investments. “Higher input costs, such as commodities, have been offset.”