business news in context, analysis with attitude

From the Wall Street Journal this weekend:

"Nearly two years after the coronavirus pandemic brought much of the U.S. economy to a halt, public companies are recording some of their best ever financial results.

"Profit growth is strong. Most companies’ sales are higher than where they were before Covid-19 - often well above. The liquidity crunch many feared in 2020 never materialized, leaving companies with sizable cash cushions. The stock market ended 2021 near record highs and far fewer public companies filed for bankruptcy in 2021 than in the years before the pandemic."

The story goes on:

"The rebound is real for smaller companies, but it is the biggest companies that have fared the best, a Wall Street Journal analysis of corporate financial data shows. For large-capitalization companies in the S&P 500 index, profits and revenue were hurt less by the pandemic’s initial economic slowdown. The biggest companies also rebounded more quickly than smaller ones, even as uncertainty deepened over Covid-19 infection rates and the spread of variants, rising inflation and supply-chain woes."

As it happens, Bloomberg has a story sounding the same themes, albeit with a more retail-centric approach:

"When Covid-19 erupted 21 months ago and upended retailers around the world, it looked like just another chapter in the sad story of an industry’s decline.

"The reality of the pandemic era, however, hasn’t played out that way.

"Yes, there was a shakeout with thousands of stores, and some chains, closing for good. A wave of retail workers lost their jobs, some permanently, and an unknown number got sick. But Covid’s shock to the system also brought overdue changes that will fortify the sector for years to come, including big investments in technology, the creation of new methods to connect with consumers and speeding online delivery.

"For all the human misery the coronavirus has brought, it’s not hard to make the case that the pandemic will ultimately strengthen the global retailers who made it through. It’s a startling turnaround from the doom-and-gloom predictions for the industry in mid-2020."

KC's View:

The argument here, almost from the first weeks of the pandemic, was that the smart companies were going to come out of it having made some fundamental changes in how they operate and how they view the world.  Everybody's businesses got pressure-tested.  It reminds me of the Ernest Hemingway line from "A Farewell To Arms:"

“The world breaks everyone and afterward many are strong in the broken places.”