End of record corporate profits widely anticipated

For almost three years, no matter what has rattled the financial markets—a debt crisis in Europe, high gasoline prices, a slower economy—investors have been soothed by rising corporate profits. But when the latest round of corporate earnings starts rolling in this week, look for a twist in the storyline: Profits are expected to fall. “China is still slowing. Manufacturing numbers in the U.S. are weak,” says Christine Short, senior manager at Standard & Poor’s Global Markets Intelligence. “You can only have so many things working against you.” Stock analysts expect earnings for companies in the Standard & Poor’s 500 index to decline 1% for April through June compared with the year before, according to S&P Capital IQ, the research arm of S&P. That would break a streak of 10 quarters of gains that started in the final quarter of 2009. The list of companies that have warned of trouble is long and varied, and includes well-known names such as McDonald’s, Cisco, Starbucks and Tiffany & Co. Add them up, and 94 companies have lowered their estimates for this earnings season, which begins today when Alcoa, the aluminum maker, reports its results. Only 26 have raised their estimates. Read the full story here.