What Some Large Companies Have Been Saying About the US-China Trade War
A new report finds that some S&P 500 companies, including AutoZone, Costco and FedEx, have expressed "negative sentiments" about the trade situation during earnings calls with investors, while others, such as Adobe and Nike, say their business in China remains strong.
January 15, 2019 at 01:13 PM
4 minute read
While trade tensions are hurting some large American companies that have a stake in China and its economy, others are doing relatively well, according to a new report based on comments that business leaders made during fourth-quarter earnings calls.
AutoZone Inc., Costco Wholesale Corp., Cintas Corp., FedEx Corp. and Micron Technology Inc. expressed “negative sentiments” about the trade situation, while Accenture, Adobe Inc., General Mills Inc. and Nike Inc. made more positive remarks, reported FactSet Research Systems Inc. The Connecticut-based company provides financial information and analytics software to investors.
FactSet issued its findings Jan. 11, days after Apple blamed weak iPhone sales in China when it dropped its revenue guidance for the fourth quarter from a midpoint of $91 billion to $84 billion. The revelation sparked speculation about whether other major U.S. companies would follow Apple's lead.
At this point, it's still too early to get a panoramic view of the trade war's impact so far on S&P 500 companies as only 20 have reported earnings results for the fourth quarter. The rest are expected to report earnings in the coming weeks.
But of the 19 S&P 500 companies that held fourth-quarter earnings conference calls through Jan. 11, a dozen cited foreign exchange rates as a factor that already had or was expected to have a negative impact on earnings or revenues. The price of raw materials, inflation, and wage and labor costs also ranked high among the top factors that had negatively impacted the companies in the FactSet report.
Meanwhile, 11 of the companies mentioned “China” and/or “tariff” during the earnings calls and were essentially divided down the middle as to whether the trade climate had helped or hurt their business.
On the negative side of the spectrum, FedEx reported that “China's economy has weakened due in part to trade disputes. As a result, we have lowered our fiscal 2019 earnings guidance and are accelerating actions to reduce costs given the uncertainty of global macroeconomic trends.”
Auto parts retailer AutoZone told investors that it would “continue to monitor developments closely and [work] with our industry associations to share our concerns about the potential negative ramifications of ongoing and increased tariffs to our customers and the broader economy.”
And Costco, the membership-only chain of warehouse clubs, stated: “There's some items that when the tariffs have been in the 10-plus percent range have been very little impact on the sales. Some, there's been a little bit more negative impact. There's some items that when the tariffs have been in the 10-plus percent range have been very little impact on the sales. Some, there's been a little bit more negative impact.”
On the positive side, Nike said it “delivered double-digit revenue growth in [second quarter]” for the 18th consecutive quarter. The company added, “While there has been uncertainty of late regarding U.S.-China relations, we have not seen any impact on our business. Nike continues to win with the consumer in China.”
Software company Adobe told investors that “China business for us has been doing well.”
Carnival Cruise Line offered mixed statements, reporting that “things are definitely better than they were say a year-plus ago in China,” while also stating that “disruptions in China” had been a challenge.
Read more:
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllEx-Twitter Exec Sues for $20M, Says Musk Fired Her as 'Petty Retribution'
Old Laws, New Tricks: Lawyers Using Patchwork of Creative Legal Theories to Target New Tech
In-House Gurus Say Inattention to Human Side of Tech Adoption Can Derail Best-Laid Plans
5 minute readTrending Stories
- 1Infant Formula Judge Sanctions Kirkland's Jim Hurst: 'Overtly Crossed the Lines'
- 2Abbott, Mead Johnson Win Defense Verdict Over Preemie Infant Formula
- 3Guarantees Are Back, Whether Law Firms Want to Talk About Them or Not
- 4Trump Files $10B Suit Against CBS in Amarillo Federal Court
- 5Preparing Your Law Firm for 2025: Smart Ways to Embrace AI & Other Technologies
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250