Persuasive language in earnings calls: An overview and a comparison of two industries

Abstract

This thesis explores persuasive language in earnings conference calls, or earnings calls for short as they are commonly called. An earnings call is an event held after the publication of quarterly results of a publicly listed company. The call starts with a presentation by the management, after which the analysts following the company can ask questions from the executives. Particularly due to the unscripted nature of the Q&A session, the earnings call is an important source of information for those interested in a company, which has also resulted in rising popularity of linguistic research focused on analyzing earnings calls. Persuasion on its part can be considered an important part of the language of earnings calls, and some of the features of persuasion have been described in prior studies. This thesis aimed for a more holistic description of the subject. Many of the related studies have also been quantitative in nature, despite a sample size similar to the one in this study.

The data examined in this thesis consisted of five earnings call transcripts each from companies in the banking and technology sectors. The first aim of the study was to identify and describe the different persuasion techniques present in the data. The second research question considered the differences in the use of those persuasion techniques between the executives and analysts. The first hypothesis was that some forms of persuasion would only be used by the other party. The hypothesis proved correct as it was found that question techniques were only used by the analysts, and promises were only made by the executives. The second hypothesis was that apart from these natural differences, the use of persuasion by the two parties would be similar. This hypothesis was incorrect, as there were differences in the use of other methods as well. The final research question was about the differences between the companies in the two industries. It was hypothesized that the calls of the technology companies would include significantly more emotional language related to persuasion, and more repetition. The differences in both categories were so small that the hypothesis could not be classified as correct.

The findings contribute towards an understanding of the genre-specific language of the earnings call. Professionals and hobbyists alike can utilize the findings to make more astute analyses of the executives’ answers as well as the interaction in the calls in general. The study also shows the value of a qualitative method in the field of study, and future studies could utilize a stronger qualitative aspect in them, along with larger sample sizes and quantitative methods to achieve generalizability. Interviews could also be included in the studies to gather information on the perspective of the earnings calls’ participants.