The company announced that its profits declined much less in the secon

Dear Friends,

Here is a detailed explanation to this question-

Meaning is crucial to solving this problem:
Understanding the intended meaning is key to solving this question; the intended core meaning of this sentence is that the company's profits declined much less in the second quarter than analysts expected and the company's business would improve in the second half of the year.

Concepts tested here: Meaning + Tenses + Parallelism + Pronouns

• The past perfect tense (marked by the use of helping verb "had") is used when a sentence contains two actions in the past; the helping verb "had" is used with the action in the "greater past".
• The simple past tense is used to refer to the later of two events that concluded in the past.
• Any elements linked by a conjunction (“and” in this sentence) must be parallel.
• The future perfect tense (marked by the use of “will have”) is used for referring to an action that will end at a particular point in time in the future.

A: This answer choice incorrectly uses the singular pronoun “it” to refer to the plural noun “profits”. Further, Option A fails to maintain parallelism between “that its profits declined much less in the second quarter than analysts had expected it to” and “its business will improve in the second half of the year”; please remember, any elements linked by a conjunction (“and” in this sentence) must be parallel.

B: Correct. This answer choice correctly uses the past perfect tense verb “had expected” to refer to the earlier of two actions that took place in the past - the analysts’ expectations regarding profits and the actual decline in profits. Further, Option B uses the phrase “that its business would improve”, conveying the intended meaning of the crucial part of this sentence- that the company's business would improve, on its own, in the second half of the year. Additionally, Option B correctly uses the singular pronoun “its” to refer to the singular noun “company”. Moreover, Option B maintains parallelism between “that its profits declined much less in the second quarter than analysts had expected” and “that its business would improve in the second half of the year”.

C: This answer choice incorrectly uses the singular pronoun “it” to refer to the plural noun phrase “profits”. Further, Option C incorrectly uses the simple past tense verb “expected” to refer to the earlier of two events, the analysts’ expectations regarding profits and the actual decline in profits; please remember, the past perfect tense (marked by the use of helping verb "had") is used when a sentence contains two actions in the past; the helping verb "had" is used with the action in the "greater past". Additionally, Option C alters the meaning of the sentence through the phrase “it will improve its business…”; the construction of this phrase incorrectly implies that the company will take action to improve its business in the second half of the year; the intended meaning of the crucial part of this sentence is that the company's business would improve, on its own, in the second half of the year.

D: This answer choice incorrectly uses the simple past tense verb “expected” to refer to the earlier of two events, the analysts’ expectations regarding profits and the actual decline in profits; please remember, the past perfect tense (marked by the use of helping verb "had") is used when a sentence contains two actions in the past; the helping verb "had" is used with the action in the "greater past". Further, Option D fails to maintain parallelism between “that its profits declined much less in the second quarter than analysts expected them to” and “its business would improve in the second half of the year”; please remember, any elements linked by a conjunction (“and” in this sentence) must be parallel.

E: This answer choice incorrectly uses the simple past tense verb “expected” to refer to the earlier of two events, the analysts’ expectations regarding profits and the actual decline in profits; please remember, the past perfect tense (marked by the use of helping verb "had") is used when a sentence contains two actions in the past; the helping verb "had" is used with the action in the "greater past". Further, Option E alters the meaning of the sentence through the clause “it will have improved its business”; the construction of this phrase and the use of the future perfect tense (marked by the use of “will have”) incorrectly imply that by the second half of the year, the company will have taken action to improve its business; the intended meaning of the crucial part of this sentence is that the company's business would improve, on its own, in the second half of the year; please remember, the future perfect tense (marked by the use of “will have”) is used for referring to an action that will end at a particular point in time in the future.

Hence, B is the best answer choice.

To understand the concept of "Simple Tenses" on GMAT, you may want to watch the following video (~1 minute):



To understand the concept of "Past Perfect Tense" on GMAT, you may want to watch the following video (~2 minutes):



To understand the concept of "Future Perfect Tense" on GMAT, you may want to watch the following video (~1 minute):



All the best!
Experts' Global Team

Without seeing the spoiler I got B in first look.

The sentence is in past perfect tense, with analysts expected earlier in time and profits declined later in time.

So C, D, and E are out. Now the choice is between A and B.

A is incorrect because of no clear antecedents (precedent) of pronoun "it". [Thanks Allen for correcting me that pronoun have antecedent and not precedent..........]

Hence B is the answer.

I think humans' explanation is great.

I think the antecedent of "it" in answer A is clear, but "it" is singular when the sentence is refering to "profits" which is plural. I think this is an error that is easier to notice. This same reason also means C is wrong. D seems awkward like "them to" is unnecessary. It's certainly implied, but I think we need "had expected" for past tense (past perfect?).

Two events had happened in the PAST
-----Analyst expected (first event/older event) ----->Profit declined(second event/new event)-----> direction of flow of time

When two event happen in the past the older event takes "Had+ed verb" and the recent event takes "ed verb"
so C,D,E are out
A and B remaining

A is out because the expectation are for future, so WOULD is the correct tense to use.

The company announced that its profits declined much less in the second quarter than analysts had expected it to and its business will improve in the second half of the year.

The earlier past action, had expected, pairs with a simple past action, declined: first, analysts expected the company profits (and possibly rose or declined) and, later, the company announced the profits declined.
Hence eliminate C,D and E.
In A, "will" cannot be accepted since this construction expresses the future from the point of view of the past: "the company announced that"

Hence C correct.

A) had expected it to and its business will --- Parallelism and Verb Tense
B) had expected and that its business would improve --- CORRECT
C) expected it would and that it will improve its business --- Verb Tense
D) expected them to and its business would improve --- Verb Tense
E) expected and that it will have improved its business --- Verb Tense

The company announced that its profits declined much less in the second quarter than analysts had expected it to and its business will improve in the second half of the year.

A) had expected it to and its business will improve
B) had expected and that its business would improve
C) expected it would and that it will improve its business
D) expected them to and its business would improve
E) expected and that it will have improved its business

1st Split -- Had Expected vs Expected
Draw a Time Line for easy understanding and to check whether the usage of DOUBLE PAST is actually required?

PAST___________________T1____________________T2_______________PRESENT
T1 - Analysts had expected profits to decline to some value, say X.
T2 - Profits declined to a value, say Y (where, Y<X)

As we can see we need a VERB SEQUENCING here, to arrange the two events that happened in the past at different time frames T1 and T2.

This eliminates choices C,D, and E.

2nd Split : PRONOUN NUMBER AGREEMENT ERROR.
As "it" is referring back to profits so we need "them" instead of "it".

This eliminates choices A and C.

3rd Split : WILL vs WOULD
As the announcement is done in the past, so the usage of WOULD is correct.

This eliminates choices A, C, and E.

4th Split:
As per the intended meaning the company announced two things. SO we need a structure like -- company announced that........ and that...... Choices in which that is missing after the "and" are incorrect. Because otherwise, it will indicate a beginning of a new Independent Clause and the intended meaning will be lost.

This eliminates choices A and D.

Edit --- Also, I missed one thing -- the usage of "expected it to" AND "expected them to" is INCORRECT. Only using "expected" would suffice.

So, choice B is the clear winner.

Meaning and error analysis:
The moment I saw 'had', I started making my time line.

analysts setting expectation in past >>>>>> profits declined ---- making perfect sense.

(A) had expected it to and its business will improve --- time line is correct. what it refers to ? quarter or profits or company. Should be profit. but then profit's business does not make any sense.
(B) had expected and that its business would improve --- As soon as I saw 'and that' I am looking for parallelism . so where is another that or what this 'that' refers to ? "The company announced that its business would improve ......" here 'its' refer to the company.
(C) expected it would and that it will improve its business ---- timeline mismatch, pronoun errors.
(D) expected them to and its business would improve --- timeline mismatch, pronoun errors.
(E) expected and that it will have improved its business --- timeline mismatch, pronoun errors.

Correct answer should be B.

As I have finished this SC, I saw 'will have' 'would have' in options and I did some research around it. Hope it will be helpful for others too.

Will, would, and have are auxiliary verbs used to form different tenses.

'Will' is used to form Future Simple, to describe something that takes place in the future.

'Will have' is used to form Future Perfect, to describe something that not simply takes place in the future, but is completed ("perfected") at some reference point in the future.



'Would' is a past-tense form of will. If you are writing about past events, you can use it to indicate something that was in the future at that point in time, but is not necessarily in the future right now. In other words, you use would to preserve the future aspect when talking about the past.

It is true that such a great split as 'expected' and 'had expected' is not an easy thing to ward off. Nevertheless, whoever cannot decide on this split can make do without that as per the following algorithm.

A. had expected it to -- what does the 'it' refer to? We are discussing 'profits' here and 'profits' is plural. Therefore, it is a wrong diction. In addition, the important 'that' parallelism is missing. Drop A.
B. the correct answer- Both the above mistakes have been rectified.
C. Same pronoun problem in A. Plus the shift of tense between the two arms of a reported speech is too eye soring.
D. Missing the 'that' parallelism is enough to kick this out.
E. Jumping from past tense to the future perfect in a reported speech is abysmal

Be happy

Hi Guys, what if option D also had the that to complete the parallelism?
Which option is better in such a case? B or D?

Notwithstanding the addition of 'that', D will still be incorrect because the sentence doesn't make clear what the analysts expected the profits to do what? If somebody means that analysts expected the profits to decline,' eliding the word 'decline'' is not correct since the word 'decline' is not present in the clause anywhere before.

Hi Bombsante, In addition to what daagh sir has already mentioned, D also has a huge tense issue that is pretty much a no go.

In this sentence, clearly two things happened in the past:
i) Company's profits declined
ii) Analysts had expected profits to decline much more than they actually did

When there are two events that happened in the past, the event that happened earlier (in this case, expectation of analysts) is expressed as past perfect (had expected). D, on the other hand, erroneously uses simple past (expected).

p.s. Our book EducationAisle Sentence Correction Nirvana discusses Past perfect tense, its application and examples in significant detail. If you or someone is interested, PM me your email-id; I can mail the corresponding section.

(A) had expected it to and its business will improve - Wrong: 1) Pronoun 2) Parallelism

(B) had expected and that its business would improve - Correct

(C) expected it would and that it will improve its business - Wrong: 1) Pronoun 2) Verb 3) Meaning

(D) expected them to and its business would improve - Wrong: 1) Verb 2) Parallelism

(E) expected and that it will have improved its business - Wrong: 1) Verb 2) Meaning

A humble request - Please give KUDOS if you like the below explanation. Motivation helps!
Let us first dissect the sentence.
The company announced
SV pair – Company announced.
that its profits declined much less in the second quarter than analysts had expected it to and its business will improve in the second half of the year.

we have a parallel list in this sentence
the company announced that its profits declined….. and its business will improve.
Here its refers to the company.
Expected it to. – Here we have an empty it in the sentence. It is not clear what the it refers to.
Had expected – we are comparing two past actions in this sentence. Earlier action being that the analysts had expected and the later the profits declined.
Here ‘that’ is used to begin a sub ordinate clause.
The sentence must also use would rather than will for the company’s uncertain business improvement
in the future.

If you are still reading this post I humbly request you to please give KUDOS.

(A) had expected it to and its business will improve
This choice is incorrect for the reasons stated above.

(B) had expected and that its business would improve
This is the correct answer choice.

(C) expected it would and that it will improve its business
It would – Here we have an empty it in the sentence. It is not clear what the it refers to. Would is not the correct verb form in this sentence. It will improve its business – there are two its that is trying to refer to the company. Be skeptical of such constructions on the GMAT.

(D) expected them to and its business would improve
Here the antecedent of the pronoun them is unclear. It appears that them refers to the profits.
Had expected is needed in this sentence to compare two actions in the past.

(E) expected and that it will have improved its business
Announced that it will have improved… is less better than to say its business would improve.
Had expected is needed in this sentence to compare two actions in the past.
Please motivate me and don’t forget to give KUDOS after you have finished reading the post.

The answer is B

The company announced that its profits declined much less in the second quarter than analysts had expected it to and its business will improve in the second half of the year.

From this prompt, we can infer that the ''announcement'' occurred after the act of ''expectation''. Hence, the past perfect verb tense of the verb ''expect'' must be used.

Since (C), (D), and (E) all use the simple past tense ''expect'' instead of the past perfect tense ''had expected'', we can eliminate (C), (D), and (E).


(A) had expected it to and its business will improve - besides the fact that this sounds super awkward, the pronoun ''it'' does not have a clear antecedent.

(B) had expected and that its business would improve - has no error. Hence, (B) is the right answer choice.

A. “The company announced THAT its profits declined…had expected it to and (that) its business will improve…”
a. Clause is in past tense. Need conditional tense with past tense. (past + conditional; present + future)
b. “it” is also wrong. What is “it”? analysts expected the profits to decline, not the company. So it should be “them”
c. Also lacks parallelism
B. “The company announced THAT its profits declined…had expected it to and THAT its business would improve…” - parallel
C. Will is wrong. Past + conditional is needed
D. “them” is wrong. Company is singular, so no logical antecedent for “them.” Lacks parallelism.
a. Clearer if use past perfect to show sequence of events
E. Will is wrong. Past + conditional is needed
a. Clearer if use past perfect to show sequence of events

EducationAisle sir,
Isn't ellipsis in play in option B as well over here? So if that's the case then the same ellipsis is in play in option D, and if we add a "that", then only thing separating option's B and D is the tense?
Where am I going wrong? Please evaluate.


The company announced that it profits declined much less than analysts had expected(them to decline)?

Furthermore,
What is the issue of parallelism in option D. I am not understanding that part.
Is it that " its businesses would improve is structurally parallel to "Analysts expected them to". But logically does not make sense. Hence, for clarity we need a that to repeat before this clause to be parallel to the earlier clause.
Please advise.

Thanks