Fewer S&P 500 Companies Are Discussing “Inflation” on Q1 Earnings Calls

With consumer prices increasing by less than 5% (year-over-year) in April 2023 for the first time since April 2021, have fewer S&P 500 companies than normal commented on inflation during their earnings conference calls for the first quarter?

The answer is yes. FactSet Document Search (which allows users to search for key words or phrases across multiple document types) was used to answer this question. Through Document Search, FactSet searched for the term “inflation” in the conference call transcripts of all the S&P 500 companies that conducted earnings conference calls from March 15 through May 11.

Of these companies, 278 have cited the term “inflation” during their earnings calls for the first quarter. This number is above the 5-year average of 211 and above the 10-year average of 163.

However, it should be noted that this is the lowest number of S&P 500 companies citing “inflation” on earnings calls going back to Q2 2021 at 222 (using current constituents and going back in time). It also marks the third consecutive quarter in which the number of S&P 500 companies citing the term “inflation” has declined quarter-over-quarter. There are still about 40 S&P 500 companies that have not reported actual earnings for the first quarter. So while the final number will likely finish higher than 278, it will fall short of the 352 from the previous quarter.

At the sector level, the Financials (48) and Industrials (48) sectors have the highest number of companies that have cited “inflation” on earnings calls for Q1. On the other hand, the Materials (93%) and Consumer Staples (89%) sectors have the highest percentages of companies that cited “inflation” on their Q1 earnings calls during this period.

Despite the decrease in the number of S&P 500 companies citing “inflation” on Q1 earnings calls, estimates for net profit margins for Q2 2023 (to 11.5% from 11.6%) and CY 2023 (to 11.6% from 11.7%) have declined slightly since March 31.

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