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More Companies Citing Negative Impact from FX than Tariffs on Q3 Earnings Calls to Date


By John Butters  |  October 11, 2019

While most S&P 500 companies will report earnings results for Q3 2019 over the next few weeks, about 4% of the companies in the index (22 companies) had reported earnings results for the third quarter through yesterday. Given the current expectations for a year-over-year decline in earnings for Q3, have these companies discussed specific factors that had a negative impact on earnings or revenues in the third quarter (or are expected to have a negative impact in future quarters) during their earnings conference calls?

To answer this question, FactSet searched for specific terms related to several factors (i.e. “currency,” “China,” etc.) in the conference call transcripts of the 22 S&P 500 companies that had conducted third quarter earnings conference calls through yesterday (October 10) to see how many companies discussed these factors. FactSet then looked to see if the company cited a negative impact, expressed a negative sentiment (i.e. “volatility,” “uncertainty,” “pressure,” “headwind,” etc.), or discussed clear underperformance in relation to the factor for either the quarter just reported or in guidance for future quarters. FactSet also compared the number of companies citing these factors in the third quarter to the number of companies that cited these same factors in the second quarter through approximately the same point in time (through July 11). The results are shown below.

Foreign exchange has again been cited on the most earnings calls to date (11) as a factor that either had a negative impact on earnings or revenues in Q3 or is expected to have a negative impact on earnings and revenues in future quarters. Half (11 of 22) of the S&P 500 companies that have conducted earnings conference calls to date for the third quarter have cited some negative impact from foreign exchange rates. However, few of these companies discussed specific currencies that had weakened or were expected to weaken against the U.S. dollar. The number of companies citing a negative impact from FX in Q3 (11) is about equal to the number of companies that cited a negative impact from this factor in Q2 (12) at about the same point in time.

It is interesting to note that while ten companies discussed tariffs or trade (in relation to international trade), only five companies cited a negative impact.

Please see full Earnings Insight report for company quotes.

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John Butters

Vice President, Senior Earnings Analyst

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).


The information contained in this article is not investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.