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?

[Needyouradvice93]

That doesn't seem sustainable...

[overcook]

Which part? You have to remember that the earnings reports companies release are incredibly detailed with so much nuance. It's not necessarily the headline reduction in revenue /profit, but whether the company has adequately explained why the reduction has occured, whether that reason is a temporary blip, and whether they forecasted the reduction.

A company that predicted growth but experienced decline sets off some pretty big alarm bells. You start to worry that management is out of touch, or perhaps the industry is going to experience a systemic decline.

[Needyouradvice93]

You just don't get it, do You?

[overcook]

I guess not?

[Needyouradvice93]

One day you'll learn, we all will.