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 Reuters Investor’s Highlights report.
|Quarterly sales (in millions)|