Firms’ Expectations Regarding Short- And Long-Term Inflation

The Federal Reserve Bank of Atlanta publishes a monthly report titled “Business Inflation Expectations” (BIE) that contains statistics from a survey of regional businesses’ views on various factors that impact profitability.  These factors include unit costs, unit cost expectations, sales levels, profit margins, and other factors.

As described on the site:

Approximately 300 panelists receive the survey each month. Panelists represent businesses of various sizes headquartered within the Sixth District, which encompasses Alabama, Florida, Georgia, and sections of Louisiana, Mississippi, and Tennessee. Panelists range from executives of large corporations to owner-operators of small businesses. The industry composition of the panel roughly reflects the makeup of the national economy. Nevertheless, survey responses are weighted by industry shares of national gross domestic product.

An excerpt from the January 2017 BIE Survey dated January 11, 2017 (involving 204 firms responding):

Respondents indicated that, on average, they expect unit costs to rise 2.0 percent over the next 12 months. Inflation uncertainty was virtually unchanged at 2.1 percent. Firms also report that, compared to this time last year, their unit costs are up 1.8 percent. Respondents’ sales levels, compared to what they consider normal conditions, were unchanged with diffusion index value of -11. Profit margins improved somewhat, with a diffusion index value of -17.

This month’s “quarterly question” concerned “Long-term inflation expectations.”  An excerpt:

Over the long term—that is, per year over the next five to 10 years—respondents expect unit costs to increase 2.8 percent, on average, up one-tenth of a percentage point from the October reading. Respondents’ uncertainty (variance) regarding this expectation went unchanged at 2.1 percent.

This month’s “special question” regarded “firm age.”

The report also includes a variety of charts and tables depicting respondents’ answers.

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RevSD, LLC offers the above commentary for informational purposes only, and does not necessarily agree with all (or any) of the views expressed by these outside parties.

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ProfitabilityIssues.com is published by RevSD, LLC.  RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future business conditions, and given these conditions, offers corporations and businesses advice, strategies, and actionable methods on how to optimally increase revenues and profitability.

S&P500 Earnings Trends – December 2016

S&P500 earnings trends and estimates are a notably important topic, for a variety of reasons, at this point in time.

FactSet publishes a report titled “Earnings Insight” that contains a variety of information including the trends and expectations of S&P500 earnings.

For reference purposes, here are two charts as seen in the “Earnings Insight” (pdf) report of December 16, 2016:

from page 19:

(click on charts to enlarge images)

S&P500 EPS trends

from page 20:

S&P500 annual EPS

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RevSD, LLC offers the above data and projections for informational purposes only, and does not necessarily agree with information provided by these outside parties.

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ProfitabilityIssues.com is published by RevSD, LLC (RevSD.com).  RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future business conditions, and given these conditions, offers corporations and businesses advice, strategies, and actionable methods on how to optimally increase revenues and profitability.

S&P500 Annual EPS Forecasts – Years 2016 Through 2018

As many are aware, Thomson Reuters publishes earnings estimates for the S&P500.

The following estimates are from Exhibit 20 of the “S&P500 Earnings Scorecard” (pdf) of December 20, 2016, and represent an aggregation of individual S&P500 component “bottom up” analyst forecasts.  For reference, the Year 2014 value is $118.78/share and the Year 2015 value is $117.46:

Year 2016 estimate:

$118.19/share

Year 2017 estimate:

$132.80/share

Year 2018 estimate:

$148.29/share

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RevSD, LLC offers the above data and projections for informational purposes only, and does not necessarily agree with information provided by these outside parties.

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ProfitabilityIssues.com is published by RevSD, LLC (RevSD.com).  RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future business conditions, and given these conditions, offers corporations and businesses advice, strategies, and actionable methods on how to optimally increase revenues and profitability.

S&P500 EPS Forecasts From Standard & Poor’s Dated December 15, 2016

As many are aware, Standard & Poor’s publishes earnings estimates for the S&P500.

For reference purposes, the most current estimates are reflected below, and are as of December 15, 2016:

Year 2016 estimates add to the following:

-From a “bottom up” perspective, operating earnings of $108.95/share

-From a “top down” perspective, operating earnings of N/A

-From a “bottom up” perspective, “as reported” earnings of $99.36/share

Year 2017 estimates add to the following:

-From a “bottom up” perspective, operating earnings of $131.11/share

-From a “top down” perspective, operating earnings of N/A

-From a “bottom up” perspective, “as reported” earnings of $122.66/share

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RevSD, LLC offers the above commentary for informational purposes only, and does not necessarily agree with all (or any) of the views expressed by these outside parties.

—–

ProfitabilityIssues.com is published by RevSD, LLC (RevSD.com).  RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future business conditions, and given these conditions, offers corporations and businesses advice, strategies, and actionable methods on how to optimally increase revenues and profitability.

Business Unit Cost Trends And Concerns For 2017

The Federal Reserve Bank of Atlanta publishes a monthly report titled “Business Inflation Expectations” (BIE) that contains statistics from a survey of regional businesses’ views on various factors that impact profitability.  These factors include unit costs, unit cost expectations, sales levels, profit margins, and other factors.

As described on the site:

Approximately 300 panelists receive the survey each month. Panelists represent businesses of various sizes headquartered within the Sixth District, which encompasses Alabama, Florida, Georgia, and sections of Louisiana, Mississippi, and Tennessee. Panelists range from executives of large corporations to owner-operators of small businesses. The industry composition of the panel roughly reflects the makeup of the national economy. Nevertheless, survey responses are weighted by industry shares of national gross domestic product.

An excerpt from the December 2016 BIE Survey dated December 16, 2016 (involving 206 firms responding):

Respondents indicated that, on average, they expect unit costs to rise 2.1 percent over the next 12 months. Inflation uncertainty was virtually unchanged at 2.2 percent. Firms also report that, compared to this time last year, their unit costs are up 1.7 percent. Respondents’ sales levels, compared to what they consider normal conditions, improved to a diffusion index value of -11 compared to -15 in November. Profit margins were unchanged, with a diffusion index value of -20.

This month’s “quarterly question” concerned “Percent above/below normal sales levels.”

This month’s “special question” regarded “Biggest concerns for 2017.”  An excerpt:

Firms’ biggest concerns for the year ahead center on their cost structure (potential health care cost, input price, and wage increases), regulatory and compliance concerns, uncertainty regarding government policy, and their ability to attract and retain qualified labor. These concerns are similar to those expressed when firms were asked the same question about 2016.

The report also includes a variety of charts and tables depicting respondents’ answers.

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RevSD, LLC offers the above commentary for informational purposes only, and does not necessarily agree with all (or any) of the views expressed by these outside parties.

—–

ProfitabilityIssues.com is published by RevSD, LLC.  RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future business conditions, and given these conditions, offers corporations and businesses advice, strategies, and actionable methods on how to optimally increase revenues and profitability.