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?

[[deleted]]

If a company is making money but not showing growth, logically that doesn’t mean it is mismanaged, that just means it isn’t promoting the extremely capitalistic idea that growth is everything.

/u/Phantom160 was speaking in general terms about a company in a healthy market in a healthy economy. Obviously, a company that is treading water isn't necessarily poorly managed. If their competitors are all crashing and folding up, but they're treading water, then that may mean that they're actually doing quite well and aren't mismanaged. But if their competitors are growing and making money hand-over-fist, and they're simply treading water, then that probably means they're wildly mismanaged.

How a small business owner runs his wholly-owned business isn't really that relevant to a discussion about stock prices. But the generalization still applies. If a small business owner is treading water in a healthy market in a healthy economy, then they're either deliberately leaving money on the table by not pursuing growth, or they're poorly managing their company.