Firms’ Inflation Expectations And Inflation’s Influence On Prices

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, pricing, 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 May 2022 BIE Survey dated May 11, 2022 (involving 199 firms responding):

  • Inflation expectations: Firms’ year-ahead inflation expectations remain relatively unchanged at 3.7 percent, on average.
  • Current economic environment: Sales levels and profit margins “compared to normal” remain relatively unchanged. Year-over-year unit cost growth is unchanged at 4.2 percent, on average.
  • Quarterly question: Approximately 50 percent of firms expect both labor costs and nonlabor costs to put significant upward influence on prices. About 30 percent of firms expect sales levels and margin adjustments to put moderate upward influence on prices during the next 12 months.
  • Special question: Firms were asked how influential aggregate inflation is when making business decisions. They were then asked to forecast the expected CPI inflation rate over the next 12 months. A breakdown of the results can be found in the special question section below.

The report also includes other questions and 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 – April 2022

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” report of April 14, 2022:

from page 27:

(click on charts to enlarge images)

S&P500 EPS forecasts for 2022 & 2023

from page 28:

S&P500 annual EPS 2012 - 2023

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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.

Annual S&P500 EPS For Years Of 2014 – 2024

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

The following estimates are from Exhibit 24 of the “S&P500 Earnings Scorecard” (pdf) of April 18, 2022, and represent an aggregation of individual S&P500 component “bottom up” analyst forecasts.  For reference, the Year 2014 value is $118.78/share; the Year 2015 value is $117.46/share; the Year 2016 value is $118.10/share; the Year 2017 value is $132.00/share; the Year 2018 value is $161.93/share; the Year 2019 value is $162.93/share; the Year 2020 value is $139.72/share; and the year 2021 value is $208.12:

Year 2022 estimate:

$227.29/share

Year 2023 estimate:

$250.11/share

Year 2024 estimate:

$275.71/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.

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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 EPS Forecasts From Standard & Poor’s April 13, 2022

As many are aware, Standard & Poor’s publishes earnings estimates for the S&P500.  (My posts concerning their estimates can be found under the S&P500 Earnings tag)

For reference purposes, the most current estimates are reflected below, and are as of April 13, 2022:

Year 2021 estimates add to the following:

-From a “bottom up” perspective, operating earnings of $208.21/share

-From a “bottom up” perspective, “as reported” earnings of $197.87/share

Year 2022 estimates add to the following:

-From a “bottom up” perspective, operating earnings of $226.29/share

-From a “bottom up” perspective, “as reported” earnings of $208.38/share

Year 2023 estimates add to the following:

-From a “bottom up” perspective, operating earnings of $249.33/share

-From a “bottom up” perspective, “as reported” earnings of $230.80/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, 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

Firms’ Year-Ahead Inflation Expectations And Demand Characteristics

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, pricing, 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 April 2022 BIE Survey dated April 13, 2022 (involving 207 firms responding):

  • Inflation expectations: Firms’ year-ahead inflation expectations remain unchanged at 3.8 percent, on average.
  • Current economic environment: Sales levels and profit margins “compared to normal” remain relatively unchanged. Year-over-year unit cost growth increased slightly to 4.2 percent, on average.
  • Quarterly question: Firms’ sales gap (percentage below “normal” unit sales levels) increased significantly to 1.3 percent above normal and remain at historically high levels.
  • Special question: Firms were asked how their levels of demand changed over the prior 12 months. They were then asked to note the actions taken in response to the change in demand. Finally, they provided information on whether they expect these changes to persist over the next 12 months. A breakdown of the results can be found in the special question section below.

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

_____

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.