Foreign Sales - Love 'em Or Leave 'em

Posted by: Howard Silverblatt on August 5, 2010

Back in 2002 S&P deleted the foreign issues from the S&P 500, in effect making the 500 a pure U.S. play, which fit well with S&Ps other country indices. But being an American company doesn’t mean that you’re not a global one. While globalization is apparent in almost all company reports, exact sales and export levels are difficult to obtain. Many companies tend to categorize sales by regions or markets, while others segregate government sales. Additionally, intra-company sales, and hence profits, are sometimes structured to take advantage of trade, tax and regulatory polices. The resulting reported data available for shareholders is therefore significantly less than the desired level for analysis. Still, with utilization of half the issues, it does permit a rare glimpse into the sales composition. The highlights shouldn’t surprise you, but the number might.

Of the reporting issues, 46.6% of all sales were produced and sold outside of the United States, down from 47.9% in 2008, 45.8% in 2007, and 43.6% in 2006.

In 2009 S&P 500 foreign sales decreased 16.0%, while domestic sales decreased 11.2%.

European sales declined to 25.6% from 27.7% of S&P 500 foreign sales, as Asia increased to 17.6% from 13.2%. Canada representing largest single country at 7.4% is down from 9.3% in 2008.

Information Technology continued to be the dominating sector with over 56% of its declared sales being foreign in nature; the sector represents 20.4% of all U.S. foreign sales.

Foreign income taxes paid declined 32%, as U.S. issues sent US$ 43 billion less to non-US governments than they did in 2008.

Half of the S&P 500 issues still do not report sufficient information for a complete breakdown - the issues are big on pictures, short on tabular tables.

For the full report click here
SP500_2009_Global_Sales.pdf