In Q2 2019, 124 S&P 500 companies (28%) mentioned "tariffs" in earnings calls, up 41% from Q1 2019 (88 companies, 21%).
Industrials led all sectors, with 35 companies citing tariffs.
10 of 11 sectors saw an increase in tariff mentions, led by Information Technology (+11).
Despite the rise, Q2 2019 mentions were still 23% lower than Q2 2018 (162 companies, 38%).
Tariff mentions had declined for three straight quarters before rising again in Q2 2019.
Opinion
The resurgence of tariff discussions in Q2 2019 highlights renewed concerns among S&P 500 companies about trade tensions, particularly in sectors like Industrials and Information Technology, which are highly sensitive to supply chain disruptions. Although tariff mentions remain below 2018 levels, the 41% quarter-over-quarter increase signals growing anxiety over potential cost pressures and profit margin risks. The reversal of the declining trend in tariff mentions suggests that companies are bracing for prolonged trade uncertainties, which could impact future investment and growth strategies.
Core Sell Point
After three quarters of decline, tariff concerns resurfaced in Q2 2019 earnings calls, reflecting rising corporate unease over ongoing trade tensions and their potential impact on supply chains and profitability.
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 second 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 second quarter?
To answer this question, FactSet searched for the term “tariff” in the conference call transcripts of the 438 S&P 500 companies that had conducted earnings conference calls between June 15 and August 8.
Of these 438 companies, 124 (or 28%) cited the term “tariff” during the call. At the sector level, the Industrials led all sectors with 35 companies citing” the term “tariff” on earnings calls.
The number of S&P 500 companies discussing tariffs on Q2 2019 earnings calls during this time is well above the number through the same point in time in the first quarter. From March 15 through May 8, 88 S&P 500 companies (or 21%) had cited the term “tariff” during their Q1 2019 earnings calls. Thus, there has been a 41% increase (124 vs. 88) in the number of S&P 500 companies citing “tariffs” in Q2 relative to Q1. At the sector level, 10 of the 11 sectors witnessed an increase in the number of S&P 500 companies citing the term “tariff” on earnings calls in Q2 2019 relative to Q1 2019, led by the Information Technology sector (+11).
However, the number of S&P 500 companies discussing tariffs on Q2 2019 earnings calls is still well below the number at the same point in time in the year-ago quarter. From June 15 (2018) through August 8 (2018), 162 S&P 500 companies (or 38%) had cited the term “tariff” on their Q2 2018 earnings calls. Thus, the number of S&P 500 companies citing “tariffs” in Q2 2019 is still 23% below the number from last year at the same point in time.
It is interesting to note that the number of S&P 500 companies citing “tariffs” had declined for three straight quarters until Q2 2019. But, based on the numbers for Q2 2019, it appears concerns about tariffs may be back on the rise for S&P 500 companies.
