During each corporate earnings season, it is not unusual for companies to comment on subjects that had an impact on their earnings and revenues in a given quarter or may have an impact on earnings and revenues in future quarters. To date, 90% of the companies in the index had reported earnings results for the third quarter. Given the continued implementation of tariffs by the Trump administration, have companies in the S&P 500 commented on “tariffs” during their earnings conference calls for the third quarter?
To answer this question, FactSet searched for the term “tariff” in the conference call transcripts of the 415 S&P 500 companies that had conducted earnings conference calls through Wednesday, November 7.
Of these 415 companies, 138 (or 33%) cited the term “tariff” during the call. It is interesting to note that both the number and percentage of S&P 500 companies discussing tariffs on Q3 earnings calls during this time are below the number and percentage through the same point in time in the second quarter. Through August 7, 157 of 417 S&P 500 companies (or 38%) had cited the term “tariff” during their Q2 earnings calls.
The small decline in the number and percentage of companies discussing tariffs in the third quarter relative to the second quarter may be a sign that there is slightly less concern in corporate America about widespread impacts from the tariffs throughout the economy.
At the sector level for the third quarter, four sectors have more than ten companies discussing tariffs on their earnings calls to date: Industrials (41), Consumer Discretionary (24), Information Technology (20), and Materials (13). At the same point in time in the second quarter, seven sectors had more than ten companies discussing tariffs on their earnings calls: Industrials (41), Consumer Discretionary (21), Information Technology (16), Materials (15), Financials (15), Health Care (13), and Consumer Staples (12).
While tariffs are still a concern in the sectors with the most companies discussing the topic in both quarters (led by the Industrials sector), other sectors have seen fewer companies discuss the topic in Q3 relative to Q2. Overall, seven sectors have seen a sequential decline in the number of companies citing tariffs, while just two sectors have seen a sequential increase.
Mr. John Butters is Vice President and Senior Earnings Analyst at FactSet. His weekly research report, “Earnings Insight,” provides analysis and commentary on trends in corporate earnings data for the S&P 500 including revisions to estimates, year-over-year growth, performance relative to expectations, and valuations. He is a widely used source for the media and has appeared on CNBC, Fox Business News, and the Business News Network. In addition, he has been cited by numerous print and online publications such as The Wall Street Journal, The Financial Times, The New York Times, MarketWatch, and Yahoo! Finance. Mr. Butters has over 15 years of experience in the financial services industry. Prior to FactSet in January 2011, he worked for more than 10 years at Thomson Reuters (Thomson Financial), most recently as Director of U.S. Earnings Research (2007-2010).
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