Companies are relying on financial engineering to achieve profit growth in the face of middling U.S. economic gains, S&P Investment Advisory Services Chairman Mike Thompson said Monday.
"A lot of what you do see in terms of the profit growth you do have now is engineering," such as stock buybacks and global labor arbitrage, he told CNBC's "Squawk Box."
"These are the levers companies have to work with. They're taking advantage of the fact that there's a lot of opportunities to just continue to engineer their earnings."
Company reports are expected to show a 6.9 percent decline in S&P 500 earnings per share for the first three months of the year, according to Thomson Reuters I/B/E/S data. Earnings per share for S&P 500-listed companies fell 2.9 percent in the final quarter of 2015.