2023-06-05 18:12:00
Senior executives in the United States are now talking a lot about something that is completely out of your control: the weather.
There are still three weeks left in the second quarter, and earnings calls for S&P 500 companies have talked more about the weather than at any time since 2019, according to data compiled by Bloomberg. And it’s not just the executives’ comments: weather-related analyst questions have doubled far compared to the first quarter, according to the data.
That renewed weather focus stems from fears among investors anticipating a economically destructive environmental pattern of El Niño this summerand after months of intense storms and snow that caused major disruptions in the US.
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It is attributed a greater weight to the climate in a general way in all sectors, according to the data, but it is most pronounced among companies in the disparate sectors of utilities and consumer discretionary, illustrating the large economic impact of extreme weather.
What further drives the discussion of climate in results calls is its asymmetrical impact. While Deere & Co. It has wet and varied conditions to drive demand and Pinnacle West Capital Corp recently benefited from a long winter in Phoenix, Arizona, electricity providers CMS Energy y Alaska Air Group they were affected by similar conditions.
In the case of Alaska Air, the airline posted just its second loss in eight quarters due to an extreme winter. Chief Executive Benito Minicucci is now bent on bolstering the company’s ability to mitigate bad weather as much as possible.
Weather: that’s not talked about
The last time the weather hit both executives and analysts also coincided with an El Niño pattern in 2019. This year’s version could herald one of the hottest North American summers on record, intense storms around the world and trillions of dollars in lost economic activity.
But despite that potential for great influence, many executives hate talking about the weather. When asked about weather-related demand on the first quarter earnings call for Sherwin Williams, CEO John Morikis responded bluntly: “I would say we don’t like to talk about the weather.”
LM
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