America Inc. Faces a Margin Stall
[Financial Analysis and Commentary]</br></br>After three years of profit-margin expansion, U.S. companies have begun to see rising costs eat into the bottom line. And for now, there is little they can do about it.</br></br>After the 2008 financial crisis, companies cleared the decks. With demand falling sharply and credit availability uncertain, they shed millions of workers and cut deeply into their spending on capital equipment. When the economy clawed its way back, they were slow to hire and slow to spend.</br></br>The result: Profits swelled. Last year, sales generated by S&P 500 companies were about 14% higher than they were in 2007, according to S&P Capital IQ's latest estimates. Operating earnings were up 21%.</br></br>But in the fourth quarter, there appears to have been a shift, with earnings growing a bit slower than sales. And analysts' estimates suggest that is something that will continue in the quarters to come.