A theme is emerging from the flood of recent corporate earnings reports: cost cuts are boosting profits. Investors are cheering, but they shouldn't. Even in these tough times, more CEOs should be talking about how they are seeking out investments, developing new technologies and making acquisitions.
That's what will set their companies up fora stronger future. Intel Corp.'s former CEO Gordon Moore had it right when he said years ago that "you can't save your way out of a recession." He meant that even in the toughest times, companies have to spend money on new ideas.Recessions always end, Moore often said, and when they do, companies that embraced innovation (创新)during the downturn won't be stuck with obsolete products and services. Instead, they'll have new things to offer' once demand picks up again.
    "Customers don't come out of recessions spending the way they did before," said Chunka Mui, who has studied how companies can capitalise on opportunities during crises at his Chicago-based consulting firm, The Devil's Advocate Group. "They demand something different."
    Surprisingly few companies are following Moore's advice of innovating during recessions. Many have been weakened by the pullback in consumer and business spending as well as tight credit conditions,which is making it harder for companies to get loans to fund their operations. That's driven some to hold cash and make drastic cost cuts. They're slashing (大幅度削减)jobs and wages and closing stores and factories.
    The aggressive cuts have allowed companies to exceed Wall Street's expectations for their earnings. In fact, the"good" news has sent the Dow Jones industrial average above 10,000 for the first time in a year. The problem is that too many companies are making widespread, not focused cuts. They're telling every division to cut 10 percent of their work force or slashing marketing dollars by the same amount companywide.
    "That is a quick way to rid a company of costs. But it doesn't help it get in a better position going forward",says Cesare Mainardi, managing director at the consulting firm Booz & Co.and coauthor of the new book Cut Costs, Grow Stronger, "and a downturn like this should force people's hand".