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U.S. Finance Chiefs Gain Confidence, Look to Grow, Survey Says

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Jan. 20 (Bloomberg) -- Chief financial officers in the U.S. turned more optimistic last quarter, a sign companies may begin deploying cash reserves, according to a survey by New York-based Deloitte LLP.

Their companies’ prospects brightened for 53 percent of executives in the October to December period, up from 47 percent in the third quarter, the survey showed today. The executives’ projections for both revenue and earnings fell as their spending projections increased.

“While large-company CFOs are still concerned about conditions within their home markets, many appear to be seeing and acting on opportunities to strengthen their businesses for the long term -- and spending some of the cash they have accumulated over the past few years,” Sanford Cockrell III, national managing partner of Deloitte’s CFO Program, said in a statement.

The share of CFOs turning less optimistic fell to 21 percent from 36 percent in the third quarter, the survey showed.

Uncertainty about the economy, unemployment and government policies, including health-care reform, tempered the respondents’ outlooks, according to the survey.

Executives across all industries expect future year-over-year revenue growth to average 6.5 percent, down from 11 percent in the last the survey. Earnings will rise 12 percent in 2011, compared with the previous forecast of 20 percent.

“Buoyed by strong results in 2010, they also see competition heating up and seem to believe the fastest revenue and earnings improvements are behind them,” wrote Cockrell.

The executives projected capital spending will climb an average of 8 percent from last year.

Jobs Outlook

Domestic employment will increase 1.8 percent over the next 12 months, the respondents said, down from 2 percent last quarter and short of a projected 3.6 percent gain in employment at overseas subsidiaries. More than 60 percent of respondents said structural changes accounted for an unemployment rate at 9.4 percent. Additionally, half said it was “harder to find sufficiently skilled staff” than it was five years ago.

Ninety-two CFOs responded to the survey taken during the two weeks ended Nov. 30. Of those, 80 percent were from companies with more than $1 billion in annual revenue.

To contact the reporter on this story: Alex Kowalski at in Washington or akowalski13@bloombeg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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