FactSet Research : Are S&P 500 Companies Discussing the Midterm Elections on Q3 Earnings Calls To Date?

Are S&P 500 Companies Discussing the Midterm Elections on Q3 Earnings Calls To Date? Earnings

By John Butters| November 8, 2022

During each corporate earnings season, companies often comment on domestic or international events that may have an impact on earnings for future quarters. Given the potential change in the political leadership of the U.S. Congress and a number of individual states after the election on November 8, have many companies in the S&P 500 commented on the upcoming election during their earnings conference calls for the third quarter?

The answer is no. Overall, few S&P 500 companies have discussed the current midterm elections on their earnings calls, and few have done so historically (at least over the past three midterm elections).

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 "election" in the conference call transcripts of the 401 S&P 500 companies that conducted third quarter earnings conference calls from September 15 through November 3 to see if the term was mentioned during the call.

The term "election" was mentioned during the earnings conference calls of 18 S&P 500 companies (or approximately 4% of total) that had conducted earnings calls between September 15 and November 3.

At the sector level, the Utilities sector has the highest number of companies (7) in which the term "election" was discussed during their earnings calls for Q3 2022 during this period. No other sector has more than two companies.

FactSet then searched for the term "election" in the conference call transcripts of all the S&P 500 companies that had conducted third quarter earnings conference calls from September 15 through the day before the election in the previous three midterm election years (2010, 2014, and 2018).

In the weeks leading up to the midterm elections, the term "election" was cited on the earnings calls of 23 S&P 500 companies in 2010, 19 S&P 500 companies in 2014, and 24 S&P 500 companies in 2018.

As the midterm election was held on different dates in each of the preceding three midterm elections, it is helpful to look at the percentages as well. Again, in the weeks leading up to the midterm elections, the term "election was cited on 8% of the earnings calls in 2010, 6% of the earnings calls in 2014, and 6% of the earnings calls in 2018.

Thus, the number and percentage of earnings calls in which the term "election" has been cited in advance of the 2022 midterm elections are slightly lower than recent midterm elections.

It is interesting to note that the term "election" is cited on a much higher number of earnings calls for S&P 500 companies during presidential election years. Over the past three presidential election years (2012, 2016, and 2020), the term "election" was cited on 96 earnings calls on average between September 15 and the day before the election. For more details, please see our article published in 2020 at this link: https://insight.factset.com/more-than-one-third-of-sp-500-companies-are-discussing-the-election-on-q3-earnings-calls

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