Topline revenue growth remains extremely weak since the end of the last recession. As shown in the chart below revenue per share has increased by a total of 32% from 2009 through the second quarter of 2014 while reported earnings per share has exploded by 261%. This has been due to the near record level of companies buying back shares to artificially boost profitability.
The problem with this activity, along with cost cutting, employment reductions and other measures to increase profitability, is that they are all finite in nature. Eventually, either revenue growth must accelerate or earnings are at risk of a significant disappointment.
As shown in the chart below, earnings have never attained the currently expected growth rate...ever.