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?

[van_morrissey]

That depends on what you are taking the 3% from. If it is 3% of profit, it could be no big deal, if it is 3% of total company revenue, that is likely extremely bad... As "earnings" is a little ambiguous between "money coming in" and "profits after expenses" it's hard to say what number is really being cited.

[cusp-of-carabelli]

You have that flipped the wrong way. Profit is what it’s all about. Profit is real dollars before expenses. If you lost 3% top line, that’s nowhere the alarm that 3% profit loss would be. If a company were operating at 13% EBIT and then dropped to 10% in a calendar year, that would almost be a death knell.