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 Reuters Investor’s Highlights report.
| Quarter | 1998 | 1999 | 2000 |
|---|---|---|---|
| Quarterly sales (in millions) | |||
| March | 13.6 | 17.9 | 25.7 |
| June | 12.9 | 20.8 | 27.4 |
| September | 16.2 | 23.9 | 28.8 |
| December | 16.1 | 24.4 | 28.6 |
| Quarterly EPS | |||
| March | 0.05 | 0.14 | 0.23 |
| June | -0.13 | 0.22 | 0.28 |
| September | |||
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