S&P 500 Companies with More Global Exposure Reported Double-Digit Earnings Decline in Q1

Coming into the Q1 earnings season, there were concerns in the market about the impact of the stronger U.S. dollar, slower global economic growth, and trade tensions on companies in the S&P 500 with higher international revenue exposure. Now that 90% of the companies in the index have reported actual results for Q1, did S&P 500 companies with higher global revenue exposure underperform S&P 500 companies with lower global revenue exposure in terms of earnings growth and revenue growth for Q1 2019?

The answer is yes.

FactSet Geographic Revenue Exposure data (based on the most recently reported fiscal year data for each company in the index) was used to answer this question. For this analysis, the index was divided into two groups: companies that generate more than 50% of sales inside the U.S. (less global exposure) and companies that generate less than 50% of sales inside the U.S. (more global exposure). Aggregate earnings and revenue growth rates were then calculated based on these two groups.

The blended (combines actual results for companies that have reported and estimated results for companies yet to report) earnings decline for the S&P 500 for Q1 2019 is -0.5%. For companies that generate more than 50% of sales inside the U.S., the blended earnings growth rate is 6.2%. For companies that generate less than 50% of sales inside the U.S., the blended earnings decline is -12.8%.

The blended revenue growth rate for the S&P 500 for Q1 2019 is 5.3%. For companies that generate more than 50% of sales inside the U.S., the blended revenue growth rate is 7.3%. For companies that generate less than 50% of sales inside the U.S., the blended revenue growth rate is 0.2%.