Giving the Earnings Call a Makeover

Written By Sneha Madhavaram, Senior Consultant

July 27, 2022

At the recent National Investor Relations Institute Annual Conference, Clermont Partners sat down with a panel of experts to discuss the evolution and best practices behind the infamous earnings conference call. 

The panel consisted of Christopher Lee, Managing Director of Research at Fidelity Investments; Deborah Pawlowski, Chairman/CEO Founder of KEI Advisors; and Harriet Hall, Virtual Events Product Manager at Investis Digital.

Below, we’ve captured the 10 most important points from the panel and included excerpts from the panelists.

1.Keep Your Metrics Consistent

“Investors must be able to easily compare metrics highlighted in the current quarter to previous quarters. When companies modify their metrics frequently, it creates a lot more work for the analysts, which in turn, makes understanding the company’s story more difficult.” –Chris Lee

2. Precondition Investors for Major Change

“The earnings call is adapting, and while a new format may be a better way to tell your company’s story, it’s important to tell investors in advance so that they are not blindsided by the changes. For example, Jamie Dimon CEO of JPMorgan told investors he will not be joining the earnings call multiple quarters preceding the actual quarter he dropped so investors had time to digest the concept.” –Chris Lee

3. Keep Your Script Contextual and Not Conceptual

“The earnings call is often one of the busiest times for both the sell-side and the buy-side, and they tune in mainly to understand how the company performed in the quarter. I like to advise my clients to host a strategy call outside of earnings so that investors have more time to conceptualize the story, be more thoughtful in their inquiry, and better understand long-term initiatives.” –Deb Pawlowski

4. Cut to the Chase With Bad News

“When there is bad news, it is best to be simple and direct in addressing the issue. Covering up bad news only makes it worse in investors’ perception.” –Chris Lee

5. Make the Call as Valuable for Investors as Possible

“More and more companies are beginning to use the earnings call for Q&A and simply post a release with their prepared remarks and financial results. It’s still unorthodox, but it allows investors and analysts to ask better questions on the call and reduces the need for one-on-one time after earnings.” –Harriet Hall

6. Use Technology to Stand Out

“Our clients are getting more and more innovative in how they relay their corporate narrative. This can include video conferences, live tweeting, collecting questions through an app, and more. These are great ways for businesses to show how tech-forward they are.” –Harriet Hall

7. Don’t Be Afraid to Get Creative

“Rather than sticking to the traditional earnings call, ask yourself what will be more beneficial to your investors? I valued Netflix’s recent earnings call format when an analyst guided the Q&A on the call. This allowed investors and analysts an opportunity to ask and receive the information that was most important to them.” –Chris Lee

8. Don’t Double Book with Your Peers

“The earnings period is the busiest time for investors, and so the most important thing you can do for them is to not schedule your earnings call at the same time as your peers.” –Deb Pawlowski

9. Remember the Fundamentals

“Do not become overly reliant on technology or sentiment analysis when crafting your script. It can be helpful at times and counterproductive at others. At the end of the day, be true to yourself and use the language that feels natural” –Deb Pawlowski

10. Prep for Preannouncing if Necessary

Preannouncing is a great tool when used correctly. Make sure to communicate with your management team and let them know why, when and how to preannounce when sharing bad news for the quarter. When the results are really bad, it’s usually better to get it out there sooner rather than later.” –Deb Pawlowski

The most important takeaways from the panelists are this: There’s more than one way to tell your story, and companies should be laser focused on relaying information in a way that makes it easy for investors to comprehend. Companies should embrace innovation and technology, but not at the detriment of the story.

If you’d like support in understanding how to evolve your earnings call and help your company stand out without overcomplicating things, give us a call. We’re here to help, and we know the tactics that are best resonating with investors.

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