Mentions of inflation on earnings calls have jumped to record levels, accelerating as companies that make up the S&P 500 report their latest quarterly results, according to analysts at Bank of America.

About three-quarters of S&P 500 earnings have been reported for the second-quarter, with “inflation” mentions soaring about 1,100% year-over-year, BofA Global Research said in an equity and quantitative strategy note Monday. That exceeds the year-over-year jump of 900% that was seen in the previous quarter.

“Companies once again posted robust margins,” BofA equity and quant strategists said in their note. “However, we are starting to see the good inflation environment turning into a bad inflation environment with many companies citing accelerating cost inflation, particularly around wages.”

Labor inflation mentions have picked up the most among the categories tracked by BofA, while companies citing higher costs tied to supply chains also more than doubled, the report shows.

Inflation concerns, rising cases of the delta variant of the coronavirus and “mixed macro data” may be weighing on corporate sentiment, which has dipped from its recent peak, according to the strategists. They used transcripts of earnings calls to measure the sentiment of S&P 500 companies that have reported their results.

“Companies are less enthused,” the BofA strategists said. “A number of companies have highlighted accelerating inflationary pressure, with some companies expecting cost pressure to outpace pricing power in the near term.”

Read: Broad shortages still plague manufacturers, ISM shows, and stunt economic recovery

But corporate results for the second-quarter have been strong, with earnings per share “now tracking a 14% beat” at $51.12, topping the strategists’ estimate, according to the report. They expected EPS of $50, or an 11% beat.

The financial, communication services, and consumer discretionary sectors are leading the beat in EPS, the strategists said.

Meanwhile, funds tracking those sectors have seen double-digit gains this year, along with the three major stock-market benchmarks, the S&P 500
Dow Jones Industrial Average

and Nasdaq Composite

The Financial Select Sector SPDR ETF

has gained about 24% in 2021, based on Monday afternoon trading, according to FactSet data. The Communication Services Select Sector SPDR Fund

has risen about 22% this year, while the Consumer Discretionary Select Sector SPDR Fund

is up around 13% for 2021, FactSet data show at last check.

As for second-quarter sales, companies in the S&P 500 are on track for a 3% beat led by energy, according to the BofA strategists. The Energy Select Sector SPDR Fund

has soared about 30% this year based on Monday afternoon trading.

“Despite strong beats so far, earnings reactions remain muted, similar to the past three earnings seasons,” the strategists said. “Companies that beat on both sales and EPS have outperformed the S&P 500” by 50 basis points the next day, they said, which is “in line with last quarter, but well below the historical average” of about 150 basis points.

Meanwhile, the S&P 500 was up about 0.1% in Monday afternoon trading for a gain this year of about 17%, according to FactSet data, at last check. The Dow, which gauges blue-chip stocks, and the tech-heavy Nasdaq were each showing lower year-to-date gains of around 14%.

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