“We've got about 13,000 product suppliers. We are monitoring the supply chain on a daily basis. There are less than 100, I would say, out there that are giving us real concern. But it only takes one to make us miss a shipment.“
That quote comes from Greg Hayes, CEO of Raytheon Technologies, speaking on an earnings call with analysts in January.
Most of what we know about the economy is derived from surveys and regulatory filings that get boiled down to a series of points that show up as a line on a chart.
But behind these points are lots of interesting anecdotes that illuminate what’s really going on. Sometimes, these insights force us to rethink the conclusions we may draw from the quantitative data.
With the help of the outstanding The Transcript newsletter, along with research provided by Deutsche Bank, Goldman Sachs, Bank of America and RBC Capital, TKer has curated some key quotes from the recent corporate earnings season.
The takeaways: Demand continues to be very strong, but sales have been hindered by persistent supply chain disruptions. Labor shortages have been a threat; companies are attempting to address the issue by increasing pay, but this is putting pressure on profit margins. Higher raw material costs are also a challenge, but many companies are preserving high margins by raising prices. Thanks to improved financial health, customers have been willing to pay up. And while earnings are expected to see growth decelerate, they’re still expected to grow.
See below for some curated quotes.
NOTE: The situation in Ukraine continues to develop. U.S. companies have very little direct exposure to the region, but they could experience indirect impact (e.g., rising energy prices, supply chain disruptions, etc.). For more, read this and this.
Demand is strong thanks to financially healthy customers
“The consumer has never been healthier. … You look at all the statistics out there. When you look at the personal balance sheets and where the consumer's at, I think they're learning how to manage through the inflation. … As we transition to calendar 2022, I would expect the consumer behavior to continue to be strong.” - Darden Restaurants
“Leisure travel, particularly in the U.S., and short-haul international market, remains very strong and is approaching a 100% recovery. ” - American Airlines
“Our customers are overwhelmingly bullish on their 2022 demand.” - Nucor Corporation