Earnings Growth

If you're like many investors who want to build capital over time and don't need dividends to supplement income, a well-managed growth fund could be the cornerstone of your portfolio.There are more than 285 growth funds, as classified by Lipper Analytical Services, far more than in any other equity fund category. So, it's a challenge to find a fund that can provide a satisfactory return without exposing you to excessive risk.Growth funds invest in companies whose earnings are expected to grow faster than those of stocks in the Standard & Poor's 500 or other major indexes.

ABBOTT LABORATORIES (ABT, NYSE, around $52): "The firm's long-range prospects are enhanced by a worldwide leadership position in in-vitro diagnostics, revitalized pharmaceutical operations, and a continual emphasis on fast-growing medical products. The company sports a 5-year growth rate of 15 percent. The issue yields 1.9 percent and has a quality ranking of A+."H&R BLOCK (HRB, NYSE, around $60): "H&R Block is the largest federal income tax preparer in the United States and Canada. The company has recorded a steady rise in earnings for nearly two decades.

PHH Corp. senior managers have canceled scheduled raises and bonuses for themselves after a lukewarm performance in company earnings."With the earnings at a rate of decline, it seemed inappropriate to get a raise or a bonus," said Robert D. Kunisch, chief executive officer of PHH."We will postpone bonuses until the company has substantial growth."Hunt Valley-based PHH specializes in vehicle and real estate management services for businesses.For the first quarter ending July 31, PHH's earnings dropped 6.2 percent compared with the same period last year.

One key to investment success is to be a step ahead of the crowd. Being among the first to recognize a trend or invest in a successful new company can prove quite profitable.It also can pay to accurately forecast a company's earnings growth, said James Craig, portfolio manager of the Janus Fund in Denver. "What we get paid to do is correctly estimate company earnings," Mr. Craig said. "Money follows earnings."We build a portfolio of companies where our estimates of earnings growth exceed what others expect," he said.

McCormick & Co. reported another quarter of spicy profits yesterday, saying that its operating earnings for the quarter that ended May 31 were up 56.5 percent from the same period of 1990.The company's net income of $14.9 million, or 36 cents a share, was a pleasant surprise to securities analysts who follow the Hunt Valley-based maker of cooking spices and other products. One analyst, John McMillin of Prudential Securities Inc. in New York, said that he had expected the earnings to be about 30 cents a share.

Cosmetic & Fragrance Concepts Inc.Chairman Louis R. Weinstein announced dramatically increased net earnings -- up 86 percent -- for the fiscal year. Mr. Weinstein attributed the earnings growth of the Savage-based cosmetics and beauty-aids retailer to its more aggressive sales plans, improved gross margins and cost-control measures. Consolidated revenues climbed 17 percent for the period, while same-store sales rose 13 percent.During the fourth quarter, the company moved to larger warehouse and office space in Savage.