U.S. Profit Growth Stalls

S&P 500 earnings seen gaining just 0.6% in first and second quarters as European slump hits U.S. recovery.

U.S. corporate profit growth stalled in the U.S. last quarter as companies from McDonald’s Corp. to 3M Co. saw gains in the world’s largest economy eroded by a slump in Europe.

Earnings at Standard & Poor’s 500 Index companies, excluding financials, are seen gaining 0.6 percent in the first and the second quarter from a year earlier, according to analysts’ estimates compiled by Bloomberg, the slowest growth rate since 2009.

Earnings Outlook

Alcoa Inc., the biggest U.S. aluminum producer, will be the first company in the Dow Jones Industrial Average to announce results when it reports today. The New York-based company is projected to post a loss of 4 cents a share, according to the average of 19 analysts’ estimates, compared with profit of 28 cents a year earlier, hurt by an average 12 percent aluminum- price decline in the quarter.

European Slump

Declining demand in Europe is prompting Dow Chemical Co., the largest U.S. chemical maker, to shut five factories and cut 900 jobs. Analysts project the Midland, Michigan-based company to post earnings of 58 cents a share, down from 82 cents a year earlier.

Microsoft Buybacks

Share repurchases will help Microsoft Corp.’s earnings per share to increase to 57 cents from 56 cents, according to analysts’ estimates. Net income will drop 6.9 percent to $4.87 billion. The world’s largest software company, based in Redmond, Washington, began a $40 billion, five-year share repurchase plan in 2008.

Auto Industry

German automakers Daimler AG and Volkswagen AG in 2012 may match last year’s record operating profit as increasing sales in the U.S. and China offset a market slump in Europe, where industrywide deliveries are expected to drop for a fifth straight year.

utsized Profit Gains

JPMorgan Chase & Co., the largest U.S. bank by assets, is estimated to report earnings of $4.53 billion, an 18 percent drop from the $5.56 billion it posted a year earlier. Citigroup will probably report a 1 percent increase in its earnings, while Bank of America Corp.’s are estimated to be unchanged.

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