US Companies Boost Profit by Stripping More Items From Earnings

Large US companies are bolstering their adjusted earnings per share by excluding items such as litigation expenses and amortization of intangible assets from their net income, even as regulators scrutinize such practices, a new analysis finds.

The analysis, compiled by data provider Calcbench Inc. and Suffolk University, examined about 260 companies that were randomly chosen from the S&P 500. These companies took combined adjustments worth almost $182 billion in 2023, with an average value of $110 million per item, according to data first seen by Bloomberg.

3M adhesive spray arranged for a photograph in Germantown, New York. The company adjusted its net income for 2023 for a $11.6 billion litigation expense.

Photographer: Gabby Jones/Bloomberg

Average adjusted net income in 2023 was nearly $3.1 billion per company, lower ...