Earnings conference calls, also known has investor conference calls, can be unnerving given the potential for either a positive or negative outcome with analysts and investors. There is definitely a right way and a wrong way to do them. The content and message delivered combined with the execution of the call directly impacts your stock. Set yourself up for success and make a favorable impression with these eight best practices.
What is an Earnings Conference Call?
An earnings conference call is a touch-base for publicly-traded companies to provide an inside look at their performance and expectations for the future. Earnings conference calls provide a rare movement to make significant information public to the investing community.
How Often Do Earnings Conference Calls Occur?
Earning calls typically happen on a quarterly basis. Companies will issue a press release with a high-level summary of the call and instructions to join.
How Long are Earnings Conference Calls?
Although, there’s no requirement for how long the call should be, typically calls last between 45-minutes to an hour duration. The Q&A session at the end can be the largest varialbe when it comes to the length of the call.
- Choose and experienced investor conference call provider – There is no shortage of providers offering smaller, automated conference call services. However, when it comes to the investment in staffing and technology to support larger moderated conference calls, the list is small. Here are a few things to look for:
- Find out where they are incorporated and how long they have been in business.
- Determine their experience hosting larger moderated investor conference calls. Ask for example calls to listen to. Also find out how many operators they have on staff to handle the call volume. Obtaining a participant report for the call is a manual process. Each caller must be answered by a live person to manually collect your attendee data. Since all of your callers are going to call in close to the same time to join the call (around 5 minutes to the hour), there can be significant hold time unless the provider has invested significantly in staff. Waiting on hold is major complaint with analysts.
- Find out about the pricing fine print. For example, most providers charge “unused line fees”. In other words, if you reserve a call for 100 callers and only have 60 callers, they will charge you for 80% minimum (80 callers). Find a provider that does not have unused line fees. Also ask about per call minimums. Finally, ask about the costs for ancillary features such as a recording of the call, participant report, Q&A, etc.
- Be Aware of Hot-Button Issues in the Industry. Monitor Wall Street research throughout the Stay educated on the prominent topics and issues analysts and investors care about — so you can respond to these concerns. Compile the questions you expect to hear during the call Q&A, and in subsequent conversations with the Street. Include questions from prior calls that may be pertinent again this quarter.
- Use a Script and Rehearse. Scripting your earnings call ensures that everyone knows what to say and when to say it and allows legal to make sure no one is going to say anything they shouldn’t. Practice your script before you do the real thing to ensure that everything flows smoother when the time. Rehearsing will also help ensure your call sounds natural despite scripting.
- Pre-record your earnings conference call in advance. This way you can edit any mistakes. Have the provider play the recording (as if it is live) and then open up at the end for Q&A. The call will appear to be live to the attendees.
- Begin the call with your companies Save Harbor statement.
- Let Content Drive Your If you don’t have a lot to say, keep your prepared remarks brief and host a longer Q&A session. For example, the minimum number of calls a development stage biotech should hold is one a year — this should be the fourth quarter call at the beginning of a calendar year when you give guidance for the year ahead.
- Liven Up the Financial Give your CFO something more to say than, “Sales came in at $20 million, an increase of 14 percent year-on-year.” Talk about why sales increased or why the net-loss figure improved.
- Manage the Q&A Queue. You have the ultimate say over who gets to ask you questions and in what order. Reward your most diligent analysts and prevent your earnings call from getting hijacked by amateurs, mom and pop investors, or short sellers. Most earnings conference call providers offer a web-based tool to manage the questions in queue and chat live with the operator running the call.
- Showcase Forthcoming Events. Earnings calls are one of the few times you have a direct line to all of your company’s key counter-parties. Tell them about that investor day that’s coming up in four weeks or about your upcoming appearance at an investor conference.
- Make the Call To reach the widest audience possible, ensure there is a replay for your earnings call and the ability to participate online, rather than just via phone.
- Your Work Isn’t Done When the Call Ends. After the call you should be making pre-arranged phone calls to your covering analysts and major shareholders. These stakeholders may have additional questions that they didn’t have the time or desire to ask on the public call. Either way, it’s a good chance to give them some personal attention and strengthen your key relationships.