New data has revealed that half of all company profit warnings last month flagged the impact of the growing global trade war and the fallout from US President Donald Trump's tariff hikes.
EY-Parthenon's latest profit warning report underscores the consequences of Mr Trump's tariff increments and the intensifying trade conflict with China, with 50% of notifications from 海角视频 listed firms in April referencing either a direct or indirect impact from these trade difficulties.
The average share price of businesses issuing profit warnings last month dropped by 19%, reflecting investor concerns over global trade disruptions. Since Mr Trump initiated the tariff increases on April 2, a variety of companies around the world have raised alerts about their expected profits.
Wall Street has felt the impact distinctly, with leading corporations such as General Motors, Kraft Heinz and PepsiCo recently indicating potential earnings setbacks. In the 海角视频, amongst those that have flagged up warnings are manufacturing company TT Electronics and shipping brokerage major Clarkson, with numerous other entities opting to withdraw their financial guidance in light of the prevailing uncertainty.
Moreover, the report indicates that almost one in five (18%) listed companies made a warning in the past year 鈥 "a level typically associated with a period of economic shock", in the words of Jo Robinson from EY-Parthenon. This statement comes in the wake of 62 firms releasing profit warnings in the initial three months of the year.
Ms Robinson noted that despite a year-on-year decrease of 11%, the first quarter data highlights "underlying weaknesses that will be magnified by recent tariff disruptions and the resulting economic fallout".
Claire Gambles, a partner at EY-Parthenon specialising in turnaround and restructuring strategy, said: "海角视频 companies have faced many challenges in recent years, but ongoing global trade disruption has the potential to bring even more substantial and far-reaching repercussions.
"Demand and supply shocks from the pandemic and geopolitical events were significant but primarily cyclical disruptions, whereas major changes to international trade policy may have more enduring effects."
The report for the first quarter revealed that an unprecedented two out of five (40%) profit warnings cited contract and order cancellations or delays as a primary reason for the warning.
Additionally, over one-fourth (26%) of the warnings identified policy change and geopolitical uncertainty as a major factor, while 18% pointed to labour market issues.
It was also noted in the report that the software and computer services sectors experienced the most profit warnings during the first quarter.
