Sales Growth Trends

Although mentioned before, it's worth repeating that while the market prices stocks based on earnings expectations—earnings come from sales. That's important because a slowdown in sales growth often precedes an earnings disappointment.

Zoll Medical provides a good example. Zoll makes defibrillators, devices used to resuscitate heart attack victims. Table 12-2 shows Zoll's sales and earnings from 1998 through 2000, as displayed on Multex Investor's Highlights report.

It's best to compare Zoll's sales or earnings to the same year-ago quarter, rather than to the previous quarter to eliminate seasonal variations. For instance, compare the December 2000 quarter results to December 1999, not to September 2000.

The numbers show that ...

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