Earnings Release Calls: Best Practices for a Stellar Meeting

For your quarterly earnings release call, your CFO and investor relations (IR) team work diligently to prepare. From building the annual plan to establishing the themes and messages to positioning the fiscal period results in relationship to that plan and the street’s expectations - your team knows what is at stake and wants to be ready to have your messages communicated effectively for this important call.

But knowing what you plan to say and delivering a successful call are not always the same thing. There are a whole host of things that can go wrong - from logistical to technical - that can derail your call. If one of these things goes wrong, at best it is a momentary hiccup during the call; at worst, you fail to comply with one of the regulatory requirements (Sarbanes-Oxley, Regulation FD, etc.) or the marketplace misunderstands and dings your stock price.

In addition to planning for the content of your call, here are some best practices you can leverage to insure your overall call is a success.

Scheduling and announcing your earnings release call

This is a required call - and you are obligated to announce it in advance to the public. In that announcement you’ll include not only time and date, but the call-in info for the actual earnings release call. Regulation Fair Disclosure (FD) requires you announce the information to everyone at the same time - and yes, posting the announcement to your website meets that requirement. On the other hand, the SEC’s Exchange Act Form 8-K requires a press release - so yes, you’ll want to do that too.

But what about other methods, like posting to social media or email blasts to your contact list? And when should you announce? These are more flexible and your decisions should be made in light of your overall IR strategy. Some ideas/recommendations:

• Plan to release at same time of quarter/day of week. Having a consistent schedule for rolling out your earnings report and call helps neutralize the guessing game of analysts or media play about whether your numbers are going to meet expectations. If you do it at different times each quarter, you may inadvertently be broadcasting in advance your results. On good quarters, you may want to release numbers sooner and earlier in the week. For tougher quarters, later and on Thursday. Even if you aren’t that blatant, your scheduling pattern may reveal more than you think. This consistency also simplifies it for your internal team for logistics and planning.
• Have a consistent time in advance of the call to announce. Having a consistent time each quarter for your call is one thing - announcing the date of that call is the other element that should be consistent. Most companies do it somewhere between one and three weeks before the call. Pick your standard - and incorporate into your IR annual plan so that it doesn’t creep up on you. Again, the more consistent these types of elements, the less likely they are to inadvertently color expectations.
• Utilize social media and other digital pathways to spread the news. Your next generation of potential investors may or may not visit your website in time to see the announcement - and may never see a press release. Concurrently announcing via social media - along with your required pathways - can help enhance the awareness in your future investors where they spend the most time online.

Utilize an earnings call system you control

In addition to being consistent in your earnings call schedule, you want to be sure you have conferencing technology that works consistently well, and in your control. When you are outsourcing your calls to an operator-assisted conferencing center, you may have a great experience - and you may not. If they don’t have the right infrastructure and you get a lot of interested parties showing up for the earnings release call, some calls may get dropped or have bad audio quality. Worse? The entire call is disconnected because of the overload - and no one is hearing your results. It then won’t matter if your numbers were good or bad - you are out of compliance and will hear about it from regulators and the marketplace.

With an up-to-date conferencing platform, you:

• Know who is speaking and when.
• Can capture and respond to written questions from those who may have a hearing or speech challenge
• Make it easy for participants to attend how they prefer - via a call-in number or through online link utilizing computer headset/VOIP.
• Can record the call for easy sharing to your site following the call.
• Easily embed in your site with your branding. Reaffirming your company’s image with your own system that reflects your style and branding guidelines is one more way to enhance your image with potential and current investors.

More importantly, have it be comfortable for your CFO and IR team to use without relearning every time.

A nice side benefit - this type of system can also be utilized for other needs in the company with clients, prospects and staff.

Practice, practice, practice for your best earnings release call

It’s not only the way to Carnegie Hall - it’s also the way to be sure you eliminate the risk of having a rocky earnings release call due to technology or losing your message when challenged. Whether you are a CFO doing this for the first time or the 25th - and no matter what results you are delivering - practicing the actual call should be standard. Run it from beginning to end at least once. Practice with the technical aspects of the conferencing system; delivering your message; and, handling the off-kilter: people who submit written questions or questions outside what you’ve practiced. You can use this opportunity to work out the kinks of the tech. It’s also a great way to practice when you get an out there question - how to address with a pivot and leveraging your message.

Consistency in your communication logistics, the technology and the practice - these are the keys to the delivery of a successful earnings call.