Q3 Profit Forecasts Hold Steady Despite Credit Market Turmoil

Sep. 17, 2007 (Investor’s Business Daily delivered by Newstex) — For all of the attention it’s gotten, the credit crunch has produced as many questions as answers. One of the main questions is how it will impact corporate profits. The answer — which starts trickling in this week as companies report third-quarter results — likely will be a mixed bag. While most experts see profits rising from a year ago, growth should be much lower than in recent quarters.

Still, forecasts have held steady even as the credit crisis has worsened and investment banks have signaled weak profits due to exposure to subprime debt and buyouts. Reuters now sees 3.4% profit growth for the quarter, down from 3.7% last week, but higher than its 2.5% projection on July 1. Monsanto MON on Monday raised its 2007 outlook, citing strong global corn sales and other upbeat trends.

After the close, Adobe Systems (NASDAQ:ADBE) ADBE beat third-quarter views, fueled by sales of recently upgraded programs. The software maker also raised fourth-quarter guidance. One reason overall expectations haven’t been slashed is that energy prices are soaring again. U.S. crude oil set a new high of $80.70 a barrel on Monday before closing at $80.57. That’s bad news for consumers and most businesses, but it does wonders for energy firms, which make up 11% of the S P 500.

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