Firms’ Business Results And Ability To Pass Along Cost Increases

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 2024 BIE Survey dated May 22, 2024 (involving 310 firms responding):

  • Inflation expectations: Firms’ year-ahead inflation expectations remained unchanged at 2.3 percent, on average.
  • Current economic environment: Sales levels and profit margins “compared to normal” decreased over the month. Year-over-year unit cost growth remained relatively unchanged at 2.7 percent, on average.
  • Quarterly question: Over the past 12 months, firms saw prices rise by an average of 4.5 percent, but they project a more moderate increase of approximately 3.4 percent in the next 12 months.
  • Special question: Firms were asked about their ability to pass through cost increases. They were also asked about their current level of demand. A breakdown of the results can be found in the special questions section.

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 – May 2024

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 May 10, 2024:

from page 28:

(click on charts to enlarge images)

S&P500 earnings estimates

from page 29:

S&P500 EPS trends

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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 Estimates For 2023 – 2026 As Of May 10, 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 May 10, 2024, 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; the year 2021 value is $208.12/share; and the year 2022 value is $218.09/share:

Year 2023 estimate:

$221.36/share

Year 2024 estimate:

$244.01/share

Year 2025 estimate:

$278.12/share

Year 2026 estimate:

$312.47/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 May 10, 2024

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 May 10, 2024:

Year 2024 estimates add to the following:

-From a “bottom up” perspective, operating earnings of $241.40/share

-From a “bottom up” perspective, “as reported” earnings of $219.10/share

Year 2025 estimates add to the following:

-From a “bottom up” perspective, operating earnings of $275.41/share

-From a “bottom up” perspective, “as reported” earnings of $252.53/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’ Cost Forecasts And Labor Situation

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 2024 BIE Survey dated April 17, 2024 (involving 297 firms responding):

  • Inflation expectations: Firms’ year-ahead inflation expectations remained relatively unchanged at 2.3 percent, on average.
  • Current economic environment: Sales levels and profit margins “compared to normal” remained relatively unchanged. Year-over-year unit cost growth significantly decreased to 2.6 percent, on average.
  • Quarterly question: Firms’ sales levels (compared to “normal” unit sales levels) increased to approximately 4.9 percent below normal.
  • Special question: Firms were asked about their 12-month realized rate of wage change and their 12-months-ahead expected rate of wage change for both low-skilled jobs and high-skilled jobs. They were also asked about the share of employees using A.I. tools, and the impact of those tools on their productivity. A breakdown of the results can be found in the special questions section.

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.