The conflict between the US, Israel, and Iran is the dominant topic in earnings conferences of Germany-listed companies. The conflict in the Middle East was discussed at 47 of the 92 earnings calls held in May. Higher commodity prices and the decline in consumer sentiment following the attacks are dampening top management’s expectations for the coming months and fueling doubts that the strong results from the first quarter can be sustained in the second quarter.
The SAFE Manager Sentiment Index, which is based on earnings calls and financial reports, fell from +0.10 points to -0.04 points in June, entering negative territory for the first time since November 2025. The decisive factor is an increase in negative comments from managers in earnings conferences.
“Many executives of listed companies in Germany expect higher commodity prices and a decline in demand due to the Iran conflict. Concerns are growing that the negative effects from the conflict will have a more pronounced impact on financial results in the second quarter,” says Florian Heider, Scientific Director of the Leibniz Institute for Financial Research SAFE.
One manager describes the impact of the Middle East conflict as “most pressing topic currently, which is the impact resulting out of the military conflict in the Middle East”. Another describes the rapidly evolving situation by stating, “The situation is currently changing from week to week.”
Strong first quarter is not enough to lift sentiment
Many companies reported positive business performance during the first quarter. One executive described the company's results as a “strong first-quarter performance,” while another stated, “We are continuing fiscal year 2026 with very strong momentum.”
In 86 of the 92 earnings calls held in May, managers used positive terms such as “strong growth“, “strong performance“, “strong momentum“, “delivered strong“, “profitable growth“, “positive momentum“ or “remains strong”. Negative business developments as reflected by the terms “revenue declined”, “revenue decline”, “demand destruction”, and “sales declined” were mentioned in 22 of the 92 conferences.
“In the June evaluation of the SAFE Index, positive statements regarding business performance in the previous quarter still dominate. However, when looking ahead to the coming months, many executives remain cautious,” says Alexander Hillert, Professor of Finance and Data Science at SAFE. The negative tone of analyst earnings calls related to the Iran conflict has contributed significantly to the decline of the SAFE Index. At the same time, the share of terms expressing uncertainty increased slightly from 1.58% to 1.63%.
"Many companies report robust business performance, but uncertainty about how the conflict in Iran will unfold is particularly evident in managers' communications. This high level of uncertainty complicates business planning and investment decisions,” says Hillert.
The SAFE Manager Sentiment Index
The SAFE Manager Sentiment Index measures the optimism or pessimism expressed by executives of listed companies in Germany monthly. Developed by Alexander Hillert and his team at the Leibniz Institute for Financial Research SAFE, the Index is based on automated text analysis that evaluates positive and negative statements in financial reports and earnings calls. The Index is based on a three-month rolling window of data.
Since May 2025, the team has systematically measured uncertainty expressed in financial communication, using the Loughran and McDonald Dictionary of Uncertainty Words. This analysis captures uncertainty based on narratives – how often corporate leaders express ambiguity, risk, or doubt. It enables pinning down what top managers are uncertain about.
The future scheduled release dates are:
- Thursday, 9 July 2026
- Tuesday, 11 August 2026
- Thursday, 10 September 2026
- Thursday, 8 October 2026
- Tuesday, 10 November 2026
- Thursday, 10 December 2026
