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

Question

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

https://www.nytimes.com/1996/07/26/business/company-reports-ibm-soars-as-it-beats-quarterly-expectations.html

I.B.M. said yesterday 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. The combined reports sent I.B.M. shares soaring nearly 13 percent and sparked a rally that lifted the rest of the market.

Verbal Question of The Day: Day 126: Sentence Correction 
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    The Official Guide for GMAT Review, 11th Edition, 2005

Practice Question  
Question No.: SC 137
Page: 660

GMATNinja · Accepted Answer

This is another one that we covered  in our recent YouTube webinar on verb tenses , so if you prefer your SC explanations in video form, feel free to head over there. We covered some pretty nasty official examples (including  this SOB ); fortunately, this one is a little bit gentler.

Whenever you see the past perfect tense on the GMAT (“had expected”), then you’ll want to look for some other “time marker” that occurs in the more recent past, generally in the form of an action in the simple past tense. And it looks like we have that here: first, analysts “had expected” profits to decline, and then the company later announced that its profits declined less than expect. Fair enough.

Trouble is, the pronoun “it” is definitely wrong. “It” could refer to “company”, but that wouldn’t make sense: the company had expected profits to decline, so we need this to say “had expected THEM to.” (A) is out.

This looks pretty good. Just as in (A), the past perfect “had expected” makes perfect sense. The parallelism works, too: “and” is followed by a subordinate clause, “that its business would improve.” So that gives us the following: “The company announced  that its profits declined … and  that its business would improve  in the second half of the year…” Fair enough. And the conditional “would” also makes sense, since it’s a prediction about the future that’s made in the past.

So we’ll keep (B).

This has the same pronoun problem as (A): the first “it” needs to refer to “profits” in order for the sentence to make sense.

You could also argue that the phrase “the company announced… that it will improve its business” doesn’t correctly convey the intended meaning: as written, the phrase suggests that the company will take actions to make its business run differently, instead of simply saying that “business will improve” – which would correctly imply that revenue will improve.

And even if you’re not convinced by that last paragraph, (C) is out because of the pronoun thing.

(D) isn’t a complete disaster, but it’s a crappier version of (B). First, the sentence makes much more sense with the past perfect “had expected”, because there are two actions (“expected profits to decline” and “announced that profits declined less…”) that happened at different times in the past.

Also, the parallelism isn’t great here. The parallelism marker “and” is followed by the clause “its business would improve”, and that isn’t ideal in GMAT-land. It’s not clear whether “its business would improve” is parallel to “analysts expected them to” or “its profits declined…” – both are clauses, so either would be structurally parallel, and that’s confusing.

But if “that” is included – as it is in (B) – then the parallelism is much, much clearer (see the explanation for (B) above).

So (B) is better than (D), and (D) can be eliminated.

(E) has the same verb tense problem as (D): the sentence makes more sense if we use the past perfect “had expected” to clarify the timeline of the past actions. Plus, it makes more sense to say that “business would improve” (suggesting that revenue increased) instead of “it will have improved its business” (which implies that the company will make changes to make the business itself better). That’s enough for us to prefer (B) over (E).

You can stop here. The answer is (B), and we’re done. But if you’re curious about the phrase “will have improved” – which isn’t all that important – keep reading.

You’re not going to see this very often on the GMAT – and it’s rarely a deciding factor when it does appear – but the phrase “will have + verb” suggests an action that will occur in the future, but before some “time marker” later in the future. For example, you could say “By the time my wife gives birth, I will have spent nine months in utter terror at the prospect of becoming a parent.” The phrase “will have spent” is in the future – but it occurs BEFORE the other future action (my wife giving birth). And in (E), there’s no reason to use that tense: “will have improved in the second quarter”… before what, exactly? The simpler, conditional “would” makes more sense.

And if that last paragraph didn’t strike a chord with you, no worries – you generally don’t need to worry about it on the GMAT. As long as you chose (B), life is good.

SaraiYaseenGMAT · Answer

Hi Guys,

There are some other important issues to take note of here!

1. Ellipsis: In A, "had expected it to" implies the word "decline," but "decline" is not in the sentence-- "declin ed " is! It's perfectly alright to leave a word out,   as long as that exact same word appears somewhere else in the sentence!

Ex. CORRECT:Joe's shoes are nicer than Bob's (shoes). The last word is optional because "shoes" already appears.
Ex. CORRECT:Joe is taller than Bob (is). The last word is optional because "is" already appears.
Ex. INCORRECT: Joe has and always will be confident. The word "been" is missing! You cannot imply a word that never appears in the sentence!! This is considered an error in ellipsis.

2. The phrase of parallelism here is "A and B", meaning that "and" must connect between two words/phrases of the same grammatical structure. In this case A is the relative clause, "that its profits declined...  So B must also be a relative clause!! "that+a subject+a verb..."  Any answer that failed to put "that" after the "and" can be eliminated!!! This is tested a lot on the SC!!!

3. Why "would" and not "will"?
This is a matter of reported speech.
A direct quote would be this: The company announced, "Our business  will  improve..."
Reported speech pulls the tense back: The company announced  that  its business  would  improve...

ExpertsGlobal5 · Answer

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):

https://www.youtube.com/watch?v=eZj-SubJwsM

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

https://www.youtube.com/watch?v=eFGxC37OOGU

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

https://www.youtube.com/watch?v=uP-daLFzXD0

All the best!
Experts' Global Team

humans · Answer

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".

Hence B is the answer.

jallenmorris · 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?).

LogicGuru1 · Answer

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.

trungnguyenn · Answer

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

aceGMAT21 · Answer

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

Show Spoiler

https://www.nytimes.com/1996/07/26/business/company-reports-ibm-soars-as-it-beats-quarterly-expectations.html

I.B.M. said yesterday 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. The combined reports sent I.B.M. shares soaring nearly 13 percent and sparked a rally that lifted the rest of the market.

Verbal Question of The Day: Day 126: Sentence Correction

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For All QOTD Questions Click Here

The Official Guide for GMAT Review, 11th Edition, 2005

Practice Question
Question No.: SC 137
Page: 660

So, choice B is the clear winner.

aragonn · Answer

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.

aragonn · Answer

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.

daagh · Answer

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

Bombsante · Answer

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?

daagh · Answer

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.

EducationAisle · Answer

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.

dabaobao · Answer

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

(D)  exp ected 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

dracarys007 · Answer

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

jaisonsunny77 · Answer

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.

mba757 · Answer

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

krndatta · Answer

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

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

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