Fast Numbers, Slow Language: Bridging Quantitative and Qualitative Earnings Signals

Financial NLP has a standard workflow: validate a sentiment tool against human labels, then trust it to extract market signal. This assumes the two evaluations measure the same thing. We test that assumption in a setting where both can be measured at once: a corpus of securities class actions (2002-2025) linking 70,500 X messages to abnormal stock returns, with a single-annotator human labelled gold sample. Running five instruments (VADER, Loughran-McDonald, FinBERT, Twitter-RoBERTa, and an LLM annotator) through one identical pipeline, we find that the relationship between construct and predictive validity depends on the sampling convention and score representation. Under conventional method-specific sampling, human agreement aligns more closely with graded same-day associations than with one-day leads. On a fixed-n panel, however, agreement has similar graded rank correlations at both horizons, while the coarse ordering remains weak. Benchmark agreement therefore establishes semantic validity but does not by itself determine predictive rankings. In a conversation that is 17.6% spam, message volume predicts neither market damage nor settlement size.

Financial language models can transform unstructured firm-specific news into structured decision signals, but financial AI research lacks an integrated deployment framework for evaluating whether those signals remain useful in financial decision systems. Computer science research has developed strong methods for time-series forecasting, text classification, multimodal stock prediction, graph-based market modeling, and machine-learning operations, yet these streams do not provide a domain-specific protocol that jointly tests financial language-model outputs under event-time observability, probability calibration, execution timing, transaction costs, liquidity constraints, capacity limits, operational diagnostics, and statistical inference. We introduce MFAST, a Market-Friction-Aware Sentiment-to-Trading framework that converts timestamped financial text into auditable, reproducible, and market-feasible trading decisions. The application is news-based trading, where firm-specific text must be linked to securities before portfolio decisions can be evaluated. The framework links Refinitiv News Analytics to Center for Research in Security Prices (CRSP) equity data, restricts the primary out-of-sample evaluation to post-release news outside disclosed foundation-model data-freshness periods, and adds a public replication arm using open financial text and public price data. Results show that decoder-only language models outperform encoder baselines and dictionary sentiment in classification, calibration, return prediction, and net portfolio performance, while operational diagnostics reveal trade-offs among accuracy, latency, memory, throughput, and inference cost. The paper shows that credible evaluation of financial language models requires an end-to-end engineering approach combining language understanding, temporal discipline, market-friction-aware deployment, and reproducible validation.

Earnings calls are a key source of financial information about public companies. However, extracting information from these calls is difficult. Unlike the templatic filings required by the U.S. Securities and Exchange Commission (SEC) to report a company's financial situation, earnings conference calls have no built-in labels, are unstructured, and feature conversational language. We explore this challenging domain by assessing the information captured by models trained on SEC filings and in-context learning methods. To establish a baseline, we first evaluate the generalization capabilities of SEC-trained models across established SEC datasets. To support our investigation, we introduce three novel benchmarks: (1) SEC Filings Benchmark (SECB), (2) Earnings Calls Benchmark (ECB), and ECB-A, a subset with 2,460 expert annotation groups to support our qualitative analysis. We find that encoder-based models struggle with the domain shift. Finally, we propose a system utilizing LLMs to perform open-ended extraction from unstructured call transcripts, verified by human evaluation (79.7% precision), providing a baseline for this valuable domain through the consistent tracking of emergent KPIs.