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Actually, it does result in earnings growth, because the revenues that DO come in are not eaten up in costs as rapidly. Labor and inventory costs are both way down.
The problem with going with 'what has happened' for a p/e ratio is that the trailing ratios are only based on the last 12 months, when they were so massively impacted by the dislocation of the recession. The earnings were almost non-existent, ( because the costs had not yet been shed but the revenues dried up over night) so the p/e's were higher than they will be going forward.
Future p/e's are not always a function of the marketing folks. They often reflect management's expectations that x amount of goods will be consumed, and if x is realistic (and I don't think many in management these days are wanting to disappoint the street, so I am expecting those projections to be extremely cautious and conservative),then management can project a pretty reasonable earnings growth because they have cut their costs. If they haven't, then they are out of business.
My references to trailing p/e is not for the historical average over the last 50 - 60 years. It is for the last 12 months.
