Earnings season is in full swing, with some 20 percent of the S&P 500 reporting results so far. Investors love to focus on the earnings scorecard--what percentage of companies have missed, beaten or reported in line with analyst estimates. But beyond the numbers, market watchers say it's equally important to pay attention to what CEOs and company executives are saying. Think of it as the earnings version of reading tea leaves.
CNBC decided to do an informal survey, perusing dozens of transcripts from earnings conference calls to see what some of the hottest buzzwords are being used by top executives. A couple of themes we have observed so far:
"DISAPPOINTMENT": The word was especially prevalent in retail earnings. From Coach to Best Buy toFive Below, retailers were generally "disappointed" in earnings and store traffic. Investors showed their disdain for the word "disappointment" loud and clear. Following earnings, Best Buy fell nearly 11 percent and Coach shares took a 6 percent hit.
"CHINA": Beyond the macro concerns about growth and IBM's big earnings miss in the region, China was a bright spot for several companies. Luxury fashion house Burberry, for example, posted double digit growth in the region thanks to plaid-hungry consumers. And even Coach, which was sorely "disappointed" with its North American holiday sales, reported 25 percent sales growth in China. It wasn't limited to fashion, though. American Express, a component of the Dow Jones Industrial Average, commented on its "strength in China" and carmaker General Motors said it planned to open four additional plants in the country through 2015.
"WEATHER": Finally, no surprise. The weather has been a big theme in earnings reports so far. We found 40 instances of the word "weather" in earnings transcripts in a wide range of companies, including Bob Evans and UPS.
No doubt there are many more words and themes investors are on the watch for: Emerging markets, currency swings and capital spending are just a few more that come to mind. And it's not something investors should take lightly.
After all, as philosopher Jean-Paul Sarte said: "Words are loaded pistols."