Goldman, Intel may lead cos’ profit push after 2-year drop

SAN FRANCISCO: Goldman Sachs Group, JPMorgan Chase and Intel may this quarter lead companies worldwide to the first profit increases in more than two years, ending the longest earnings recession on record. Buoyed by finance and semiconductors, profits at the world���s biggest companies are projected to grow 63% in the final three months of 2009, snapping nine straight quarterly declines.

In the third quarter just completed, earnings for companies in the S&P 500 Index may drop 23% from a year ago, when a lending freeze led to the worst financial crisis since the 1930s, according to analysts��� estimates compiled by Standard & Poor���s and Bloomberg. Alcoa is the first member of the Dow Jones Industrial Average to report on October 7.

���Most management teams are seeing a pulse in their business,��� said Lawrence Creatura, a portfolio manager at Federated Clover Investment Advisors, which oversees $407 billion. ���Last year at this time markets were rigid with fear, as was the consumer. It���s going to be pretty easy to do better than that even if the economy is firing on one cylinder.��� The fourth-quarter may be an ���inflection point��� that signals a turn in profit, said Creatura, who is based in Rochester, New York.

JPMorgan, Goldman Sachs and Intel���s fourth-quarter gains will be marked by easy comparisons to last year, when credit markets seized and banks choking on billions of dollars in real-estate losses stopped lending. US GDP shrank 5.4% a year ago and consumer spending stalled.

Analysts project S&P 500 financial companies��� fourth-quarter earnings will more than double from a year ago, when five of the six biggest banks reported a loss of more than $1 billion, according to estimates. Financial institutions worldwide have reported more than $1.6 trillion in credit losses since 2007.