Earnings: Cycles & Slumps

Year 1967 worked some uneven effects on corporate balance sheets. While the overall total of after-tax profits is expected to show a decline of almost 5% (to about $47 billion) from the year before, results from early-reporting U.S. corporations suggest that a number of industries registered sizable gains.

At first glance, that would seem to bolster the case for conglomerates, since such acquisition-minded companies argue that their diversification activities are the best hedge against cyclical swings in a single industry. But conglomerates can have slumps of their own. Litton Industries, a...

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