Fewer S&P 500 Companies Discussing “Recession” on Earnings Calls for 3rd Straight Quarter

Given the continuing concern in the market about a possible economic slowdown or recession, have more S&P 500 companies than normal commented on recession during their earnings conference calls for the first quarter?

The answer is yes. FactSet Document Search (which allows users to search for key words or phrases across multiple document types) was used to answer this question. Through Document Search, FactSet searched for the term “recession” in the conference call transcripts of all the S&P 500 companies that conducted earnings conference calls from March 15 through May 18.

Of these companies, 107 cited the term “recession” during their earnings call for the first quarter. This number is well above the 5-year average of 77 and the 10-year average of 59.

At the sector level, the Financials (30) and Industrials (22) sectors have the highest number of S&P 500 companies citing “recession” on Q1 earnings calls, while the Financials (44%) and Real Estate (37%) sectors have the highest percentages of companies citing “recession” on Q1 earnings calls.

However, it should be noted that after peaking in the second quarter, the number of S&P 500 companies citing “recession” on earnings calls has declined for the third straight quarter. As of today, the number of S&P 500 companies citing “recession” on earnings calls for Q1 2023 is 27% below the number in Q4 2022 (147), 42% below the number in Q3 2022 (184) and 55% below the number in Q2 2022 (238). There are still about 25 S&P 500 companies that have not reported actual earnings for the first quarter. Thus, while the final number could finish higher than 107, it will fall short of the numbers from the previous three quarters.

It is also interesting to note that few S&P 500 companies are discussing the debt ceiling as well. The term “debt ceiling” has been cited on the earnings calls of just 13 S&P 500 companies from March 15 through May 18.

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