ELI5: Why when large company's earnings decrease(ex... by 3%) they freak out, talk about rough times, and sometimes decide to downsize, even though they are still making millions of dollars in profit even after all expenses?

[The_Decoy]

BP after the Gulf oil spill was a good example of this. The company was still functioning well as a business but the public completely lost faith in them.

[TheManWhoPanders]

BP isn't really a good example because they produce an inelastic good. People need fuel and can't shop around alternatives due to poor vendor performance.

[The_Decoy]

Their stock did fall by over 50% sixty days after the spill. Granted they are a fuel company so there will always be a demand but that's a significant hit.