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Has the Market Punished S&P 500 Companies with Higher Global Exposure?

By John Butters, Senior Earnings Analyst
Mar 27, 2015

As we mentioned in last week’s Earnings Insight, concerns are growing in the market about the combined impact of lower global economic growth and the stronger U.S. dollar on the sales and earnings of companies in the S&P 500. Overall, the value of the S&P 500 index has decreased by 0.1% since the start of the quarter, from 2058.90 to 2056.15. How has global exposure impacted price changes for S&P 500 companies?

We used FactSet Geographic Revenue Exposure data for the most recently reported fiscal year to analyze global sales exposure for all the companies in the S&P 500. For this particular analysis, the index was divided into two groups: companies that generate more than 50% of sales inside the U.S. and companies that generate less than 50% of sales inside the U.S. We then calculated the average and median price changes (since the start of the quarter) for these two groups.

The average price change from December 31 through March 26 for all companies in the S&P 500 was 0.6%. During this same period, companies that generate more than 50% of sales inside the U.S. experienced an average price change of 1.5%, while companies that generate less than 50% of sales inside the U.S. experienced an average price change of -1.8%.

The median price change for all companies in the S&P 500 during this period was 0.1%. Companies that generate more than 50% of sales inside the U.S. experienced a median price change of 0.7%, while companies that generate less than 50% of sales inside the U.S. experiences a median price change of -1.2%.

For more information on FactSet global exposure data, see How to Measure, Manage, and Avoid Geopolitical Risk.

Read more about earnings trends in this edition of FactSet Earnings Insight. Visit www.factset.com/earningsinsight to launch the latest report.

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