Operating leverage in this sense probably has to do with their handle on costs. I would agree they have much better operating leverage today than they did 6 months ago, but I also agree that overcapacity in many places, tech companies especially, is nasty and not going to improve overnight. Operating leverage is just another bit of lingo that corporate puts out to confuse and confound the analyst lackeys and the people who follow this stuff. Just the type of stuff Warren Buffett and others like him always warn about avoiding. The biggest fallacy though is in the theory of earnings as it is. Once again the masses pay no attention to cash flow, just plain vanilla earnings which are always manipulated heavily when you let them pass off lingo like operating leverage.