As stocks climb ever higher, professional investors are worried that "adjusted" earnings figures published by financial analysts are making many big U.S. companies look far more successful than they really are.
An analysis of results from 500 major companies by The Associated Press found that the gap between adjusted profits, which often leave out various expenses, and the real, bottom-line earnings has widened dramatically over the past five years. Some companies that seem profitable on an adjusted basis are actually losing money.
Among the items often left out of adjusted figures that help pump them up:
— The cost of laying off workers.
— A fall in the value of patents and other "intangible" assets.
— The expense of handing out stock to employees.
— Losses from a failed business venture.