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July 21, 2019, 4:38 p.m. EDT

Earnings season: Here are the 9 S&P 500 companies blaming the trade war for performance or outlook, so far

Dow components Nike and Goldman Sachs make the list

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By Chris Matthews, MarketWatch


MarketWatch photo illustration/Getty Images, Reuters
Presidents Trump and Xi Jinping’s trade standoff is of growing concern

The long-running trade standoff between the United States and China has often moved markets, as investors have feared the cumulating effect of higher costs and growing uncertainty on corporate performance.

And while these new trade barriers have not been enough to stop major indexes — the S&P 500 /zigman2/quotes/210599714/realtime SPX -0.07% , Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.14% and Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP -0.22% —from reaching new highs, they are of great concern to individual companies that have increasingly cited trade concerns as reason for poor performance in recent weeks.

The following companies cited trade concerns in earnings calls in recent weeks comprise a narrow set of industrial, materials and semiconductor stocks. But as second-quarter earnings season unfolds, the number of companies citing trade concerns will be closely watched by investors, and may threaten the broader bull market.

PPG Industries In c. /zigman2/quotes/202418877/composite PPG +0.99%

The paint and coatings supplier beat second-quarter earnings estimates for the second quarter, but fell short of revenue targets, when it announced results on Thursday.

Chairman and CEO Michael McGarry said in a conference call that the company expects “global economy activity to remain sluggish in the third quarter” citing “regional and country trade disputes” as a reason for recent, subdued demand.

PPG supplies coatings for Chinese manufacturers of auto parts, and said that the “single biggest reason” for weak demand from China, “is the trade war, if that’s what you want to call it.”

“People have money in China. People are employed. It’s a lack of consumer confidence . . . for major purchases, they’re sitting on the sidelines to see how it turns out,” he said.

CSX Corp. /zigman2/quotes/208536759/composite CSX +1.29%  

Shares in the railroad operator tumbled 10.2% when it announced that second-quarter profits on July and revenue fell year-over-year, below analyst forecasts.

Chief Executive James Foote said in an earnings call on Tuesday that the “present economic backdrop is one of the most puzzling I have experienced in my career,” while Mark Wallace, executive vice president of sales and marketing, said “obviously what would help in the back half would be a resolution or clarity on trade tariffs.”

Union Pacific Corp . /zigman2/quotes/209717171/composite UNP +2.23%  

Shares of the railroad freight company sold off more than 6% on Tuesday, in apparent sympathy with weak results from rival CSX, but won back most of those gains when it announced second-quarter earnings and sales that beat expectations.

Nevertheless, Kenny Rocker, executive vice president of marketing and sales warned that “uncertainty and trade and the economy” could spell trouble in the fourth quarter of the year, given that many customers rushed to move inventory during the final quarter of 2018, demand that will not repeat this year.

He also said that trade barriers are affecting its agricultural business, given Chinese restrictions on agricultural purchases.

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US : S&P US
3,007.39
-2.18 -0.07%
Volume: 1.89B
Sept. 13, 2019 4:56p
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
27,219.52
+37.07 +0.14%
Volume: 255.26M
Sept. 13, 2019 4:56p
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/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
8,176.71
-17.75 -0.22%
Volume: 1.73M
Sept. 13, 2019 5:16p
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/zigman2/quotes/202418877/composite
US : U.S.: NYSE
$ 119.38
+1.17 +0.99%
Volume: 843,854
Sept. 13, 2019 6:30p
P/E Ratio
23.49
Dividend Yield
1.71%
Market Cap
$28.21 billion
Rev. per Employee
$325,032
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/zigman2/quotes/208536759/composite
US : U.S.: Nasdaq
$ 72.47
+0.92 +1.29%
Volume: 5.51M
Sept. 13, 2019 4:00p
P/E Ratio
17.42
Dividend Yield
1.32%
Market Cap
$57.84 billion
Rev. per Employee
$544,444
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/zigman2/quotes/209717171/composite
US : U.S.: NYSE
$ 171.45
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Volume: 3.16M
Sept. 13, 2019 6:30p
P/E Ratio
20.36
Dividend Yield
2.06%
Market Cap
$120.79 billion
Rev. per Employee
$544,047
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