NEW YORK (Reuters) - Double-digit U.S. corporate earnings growth could continue into next year as companies capitalize on the benefits of recent mergers, fund manager Margaret Patel said on Tuesday.
"I think we'll continue to see pretty good earnings growth," the senior fund manager for Pioneer Investment Management said at the Reuters Investment Outlook 2007 Summit here. "We'll continue to see mergers of companies that will be synergistic. I think we'll see that as a source of earnings growth,"
Profits for Standard & Poor's 500 companies rose 21.1 percent in the third quarter, according to Reuters Estimates, marking the 17th straight quarter of double-digit earnings growth. For the year, analysts polled by Reuters Estimates forecast earnings growth of 14.4 percent.
Patel, who is based in Boston, also said she likes plans by Freeport McMoran Copper & Gold Inc. (FCX.N: Quote, Profile, Research, Stock Buzz) to buy Phelps Dodge Corp. PD.N, which would create the world's largest publicly traded copper company.
"They both have become leaders...the marriage would be very attractive. Phelps is undervalued, but you could make the case that so is Freeport," she said, noting that the combination would create better diversification of assets.
Freeport is the top holding in the Pioneer High-Yield Fund TAHYX.O, which Patel manages. The fund is up about 8 percent as of October 31.
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