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

Earnings

By John Butters  |  May 19, 2023

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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This blog post is for informational purposes only. The information contained in this blog post is not legal, tax, or investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.

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John Butters

Vice President, Senior Earnings Analyst

Mr. John Butters is Vice President and Senior Earnings Analyst at FactSet. His 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, The Financial Times, The New York Times, MarketWatch, and Yahoo! Finance. Mr. Butters has over 15 years of experience in the financial services industry. Prior to FactSet in January 2011, he worked for more than 10 years at Thomson Reuters (Thomson Financial), most recently as Director of U.S. Earnings Research (2007-2010).

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The information contained in this article is not investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.