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During each corporate earnings season, it is not unusual for companies to comment on subjects that had an impact on their earnings and revenues for a given quarter or may have an impact on earnings and revenues for future quarters. While the majority of S&P 500 companies will report earnings results for Q2 2017 over the next few weeks, approximately 5% of the companies in the index (25 companies) had reported earnings results for the second quarter through Wednesday (July 12).

Back in January and February, a number of S&P 500 companies commented (during their earnings calls for the fourth quarter) on potential changes to government policies due to the election of Donald Trump as president. Given the Trump administration has now been in office for about six months, have companies in the S&P 500 continued to comment on the Trump administration during their earnings conference calls for the second quarter?

To answer this question, FactSet searched for the terms “Trump” and “administration” in the conference call transcripts of the 25 S&P 500 companies that had conducted second quarter earnings conference calls through July 12 to see how many companies discussed these terms. The term “administration” was only counted if it was used to reference the Trump administration.

Of the 25 S&P 500 companies that had reported actual results for Q2 2017 through July 12, only two (or 8%) cited the term “Trump” or “administration” during their Q2 earnings calls.

During the Q1 earnings season through the same point in time (April 12), eight of the 25 S&P 500 companies (or 32%) that had reported actual results for Q1 2017 cited the term “Trump” or “administration” during their Q1 earnings calls.

During the Q4 earnings season through the same point in time (January 12), 16 of the 24 S&P 500 companies (or 67%) that had reported actual results for Q4 2016 cited the term “Trump” or “administration” during their Q4 earnings calls.

The decline in “Trump” citations over the past six months may be a sign that corporations are less confident today relative to the start of the year that the policies proposed by President Trump will be enacted in the near future.  

From the Transcripts 

“But there is an expectation that indeed the new administration will launch critical reforms in order to boost the business and the economic growth. And this economic reform probably, I would set – the one which are the most important, the healthcare reform, the tax reform, the trade reform, and anything linked to the infrastructure investments. And all of these four were the ones supposed to indeed unleash more growth for the business, so the business could invest and drive more growth. And by driving more growth and driving more investments, we'd have a positive impact. The fact of the matter is that would – I would say this to be honest, three months ago, because just reading the observers and all the analyses, we believe that these four reforms would happen reasonably rapidly in the U.S. And fact of the matter, they are not yet being announced or executed, and so we are in this zone where the business is still waiting.” –Accenture (June 22) 

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Senior Earnings Analyst
John’s weekly research report, Earnings Insight provides analysis and commentary on trends in corporate earnings data for the S&P 500, including revisions to estimates, year-over-year growth, performance relative to expectations, and valuations. He is a widely used source for the media and has appeared on CNBC, Fox Business News, and the Business News Network. In addition, he has been cited by numerous print and online publications such as The Wall Street Journal, Financial Times, The New York Times, MarketWatch, and Yahoo! Finance.

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