By John Butters, FactSet
On November 8, voters in the U.S. will elect a new president and a new Congress, with control of both branches of government at stake. During each corporate earnings season, it is not unusual for companies to comment on domestic or international events that impacted their earnings and revenues for a given quarter, or may have an impact on earnings and revenues for future quarters. Given the unknown results of the upcoming election, have companies in the S&P 500 been commenting on the election during their earnings conference calls for the third quarter? How concerned are S&P 500 companies about the election?
To answer this question, FactSet searched for the term “election” in the conference call transcripts of the S&P 500 companies that have conducted third quarter earnings conference calls through November 2 to see if the term was mentioned during the call.
The term “election” was mentioned during the earnings conference calls of 80 S&P 500 companies (or 21% of the 386 S&P 500 companies that had reported earnings through November 2). At the sector level, the Financials (15), Consumer Discretionary (14), and Industrials (13) sectors have the highest number of companies in which the term “election” was discussed during their earnings calls for Q3 2016 during this period.
What Do the Mentions Mean?
[drizzle]However, it is interesting to note that the total number of S&P 500 companies that have mentioned “election” in 2016 (80) is 20% below the number recorded over this same time frame in 2012 (100). Fewer S&P 500 companies have discussed the election in 2016 relative to 2012 over the same time frame.
Of the 80 companies that have discussed the election in 2016, 32 (or 40%) expressed some negative sentiment about the election. These companies stated that the election was a contributing factor in Q3 2016 (or would be a contributing factor in Q4 2016) to macro uncertainty, a slowdown in business activity, or to lower consumer and business confidence.
For a details on these 32 companies and their comments about the election, please see today’s full report.