Download this article in PDF format.
Quarterly or annual earnings calls—conference calls that involve managers of public companies, analysts, investors and the media—can be pretty revealing. Even companies that don’t generally do one-on-one interviews with media outlets allocate this time to discussing earnings, operational performance, market challenges, new opportunities and other key topics of interest.
“An earnings call is a quarterly touch-base for publicly-owned companies to provide an inside look at their performance and expectations for the future,” Public.com states. “Outside of company announcements, press releases, and planned analyst meetings, earnings calls provide a rare movement to make significant information public to the investment community.”
A Peek Under the Covers
Earnings calls also give organizations like Avnet Silica a rare glimpse into what’s keeping executives up at night right now and which industries are most concerned about global issues like supply chain disruptions and uncertainty. Seizing this opportunity, the European semiconductor distributor and specialist recently reviewed the transcripts of more than 30,000 different earnings calls that took place between January 2018 and April 2022.
During those calls, the participants discussed their companies’ most recent quarter.
For the first time in years, every company in 12 different sectors raised supply chain concerns in their quarterly earnings calls. In Report: The 20 industries most concerned about supply chain issues in 2022, Avnet Silica outlines some of its key findings as:
- For the first time in recent years, 100% of earnings calls discussed supply chain concerns in 12 different sectors.
- Of the 20 sectors most focused on supply chain issues, more than half are reliant on electronic components for manufacturing, and more than a quarter are involved in the supply of food and groceries.
- Inflation, supply chain and talent top the list of growing concerns for company executives and their investors, with inflation being the fastest growing topic on earnings call agendas this year.
- Supply chain concerns continue to grow, with the topic claiming airtime in 60% of earnings calls across all industries in 2022 compared with 47% in 2021.
The electronics sector is particularly concerned about its supply chain. As semiconductor shortages persist, Avnet Silica says supply chain issues were brought up on 100% of earnings calls in 12 different sectors this year, including automotive, electronic components, computer hardware and consumer tech.
“Sectors heavily reliant on electronics manufacturing, make up more than half of the 20 sectors most focused on the supply chain at the boardroom level,” it points out. “And sectors involved in food production and distribution, from farming to groceries, make up more than a quarter of the companies most concerned about their supply chains.”
Demand is Outstripping Supply
Inflation, supply chain and talent are the three most pressing concerns for the world’s top companies right now, and for good reason. The annual inflation rate in the U.S. unexpectedly accelerated to 8.6% in May of 2022, Trading Economics reports, the highest it’s been since December 1981.
Avnet Silica says inflation is the fastest growing topic on executive agendas right now and that it was mentioned in 58% of earnings calls this year (up from 38% last year). Other growing concerns include supply chain (up 13% compared to 2021), talent shortages (up 8%), innovation (up 8%) and leadership (up 6%).
And while the pandemic added stress and exposed vulnerabilities, Avnet Silica says the fact that demand is outstripping supply is creating most of the supply chain-related headaches right now. “There are more and more electronic components going into so many of our products these days, from our clothes to our cars,” it reports. “And the rate at which consumer demand grows is not as easily matched by growth in production of electronic components like semiconductors and microcontrollers.”
