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Third Highest Number of S&P 500 Cos. Citing “Supply Chain” on Q1 Earnings Calls in Over 10 Years

Earnings

By John Butters  |  May 23, 2022

During each corporate earnings season, companies often comment on subjects that had an impact on their business in a given quarter, or may have an impact on their business in future quarters. Given the concerns in the market about supply chain disruptions, did more S&P 500 companies than normal comment on supply chains during their earnings conference calls for the first quarter?

Searching for Mentions Across Conference Call Transcripts

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 “supply chain” in the conference call transcripts of all S&P 500 companies that conducted earnings conference calls from March 15 through May 19.

Of these companies, 338 cited the term “supply chain” during their earnings calls for the first quarter, which is well above the five-year average of 199. In fact, this is the third highest number of S&P 500 companies citing “supply chain” on earnings calls going back to at least 2010 (using current index constituents going back in time). The current record is 363, which occurred in Q3 2021. In addition, the first quarter also marked the second highest percentage of S&P 500 companies citing “supply chain” on quarterly earnings calls going back to at least 2010 at 73% (338 out of 460).

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At the sector level, the Industrials (62) and Information Technology (48) sectors have the highest number of companies that cited “supply chain” on earnings calls for Q1. On the other hand, the Materials (93%) and Industrials (91%) sectors have the highest percentages of companies that cited “supply chain” on their Q1 earnings calls during this period.

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Impact on Net Profit Margin Expectations

Given the high number of S&P 500 companies that have cited “supply chain” on Q1 earnings calls, have net profit margin expectations for the S&P 500 for Q2 2022 and CY 2022 been revised? The current net profit margin estimate of 12.5% for Q2 2022 is below the estimate of 12.7% on March 31, while the current net profit margin estimate of 12.6% for CY 2022 is also below the estimate of 12.7% on March 31.

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The first quarter was one of the most challenging periods yet related to supply chain disruptions, increased costs, and persistently high inflation. -Walmart (May 17)

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This blog post is for informational purposes only. The information contained in this blog post is not legal, tax, or 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.

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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).

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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.