As we wrap up one of the more extraordinary earnings seasons in years, it’s clear that companies were largely able to deliver solid earnings results during Q1 owing in part to pull-forward buying behavior ahead of tariff impact, though challenging dynamics existed for certain sectors, most notably Materials and Energy.
Heading into earnings season, our Q1’25 Inside The Buy-Side® Earnings Primer® survey, published April 10, revealed a sharp reversal in optimism with both investor sentiment and perceived executive tone exhibiting 40%+ pullbacks QoQ, the largest on record, driven by tariff concerns, policy uncertainty, and deteriorating growth forecasts.
What I value about the firm more broadly is they stay very grounded in what the data is telling them. They are not rote in their interpretation of the data. Corbin provides good color and experienced, practical and grounded perspective.
CEO | Basic Materials
This earnings season, executive views remain mixed with many continuing to navigate a challenging operating environment.
Our analysis reveals the fundamentals of the Materials sector remain challenged, albeit at uneven levels, with outlooks clouded and executives preparing for various scenarios contingent upon how trade negotiations unfold and the extent to which tariff impacts ripple through the economy as the year progresses.
Executive commentary reflects an increasingly cautious stance, with even those posting solid Q1 results acknowledging potential headwinds from fluctuating trade policy dynamics and downbeat consumer sentiment, causing them to soften 2025 outlooks (or reaffirm guidance rather than raising).
A sense of optimism at the start of the year has given way to tariff turmoil and souring consumer sentiment, clouding outlooks. With costs for many expected to rise no matter how trade negotiations shake out, companies are contending with a challenging environment and heightened uncertainty.
Mackenzie has been a team member at Corbin Advisors since 2022
As one would expect with tariffs top of mind, mitigation plans have featured heavily during earnings calls, with executives highlighting steps to dampen the impact, both already underway and planned, such as supply chain optimization and pricing actions. In addition, several emphasized relatively favorable positioning due to localized manufacturing footprints or USMCA tariff exemptions.
Now more than ever, realism, agility, and transparency are paramount. Executives who have a clear-eyed view of risk exposure, scenario planning, and the potential duration and depth of downstream effects will be best positioned to execute and win investor trust until the tsunami-sized wave settles.
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