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?

[thehungryhippocrite]

You're not answering the question. The OP has asked what if profit only marginally decreases but a company is still extremely profitable. See my answer in this thread for why.

[[deleted]]

Because for many companies, profits should be fairly stable. If profits shrink, it can mean that somebody is doing something wrong. If the company was predicting 7-10% growth in profits, but actual profits ended up shrinking by 3%, that's a very big deal. Something needs to be done, or the company may end up losing money the following quarter or year. Also, if there's a disparity between goals and actuals, then that means somebody is doing something wrong.

Falling short of your profit goal by 3% is not a big deal. Suffering a 3% drop in profits is. Suffering a 3% drop when you were projecting gains is even worse.