Earnings call

Anearnings callis ateleconference,orwebcast,in which apublic companydiscusses the financial results of a reporting period ( "earnings guidance"). The name comes fromearnings per share(EPS), the bottom line number in theincome statementdivided by the number of shares outstanding. The US-basedNational Investor Relations Institute(NIRI) says that 92% of companies represented by their members conduct earnings calls and that virtually all of these are webcast.Transcripts of calls may be made available either by the company or a third party.

The calls are usually preceded or accompanied by apress releasecontaining a summary of the financial results, and possibly by a more detailed filing under securities law. Earnings calls usually happen, or at least begin, while thestock marketon which the company's shares are traded is closed to trading, so that all investors will have had a chance to hear management's presentation before trading in the stock resumes.

Generally, the call will begin with a company official, typically theInvestor Relations Officer(IRO), reading asafe harborstatement to limit the company's liability should actual results prove different from expected indicators reported in the discussion. Then one or more company officials, often including theChief executive officerandChief financial officer,will discuss the operational results and financial statements for the period just ended and their outlook for the future. The teleconference will then be opened for questions by investors,financial analysts,and other call participants. Management will answer many of these questions, although if the data is unavailable to them they may decline or defer response. Depending on the size and complexity of the company, the difference between actual and expected results, and other factors, the length of the call will vary.

There is no general requirement for how far in advance notice of a call must be given. However, keeping the investor and analyst communities happy is part of management's job, so the call will generally be announced a few days or weeks in advance. If the company has a website, then there will probably be a section titledInvestor RelationsorInvestors,where call schedules and archived past calls will typically be posted.

Many companies are tracked by financial analysts that publish estimates of earnings per share (EPS). The company may also providefinancial guidanceas to what EPS are likely to be. If management knows that its results are going to be significantly different from its guidance or from analyst expectations, it may choose to make apreannouncementof differing results. See alsoEarnings management.

In 2013, the National Investor Relations Institute (NIRI) publishedStandards of Practice: Earnings Release Content,available to NIRI members.

United States

If the call occurs within 48 hours of a press release filed with theUnited States Securities and Exchange Commission(SEC) onForm 8-Kand meets certain other criteria, there is no obligation to separately report the call to the SEC. Otherwise, it must be reported on Form 8-K. If the call contains non-Generally Accepted Accounting Principles(GAAP) information, then there are additional requirements under SEC regulations, includingRegulation FD.

Companies headquartered in the United States with securities traded on a US-based stock market or other exchange are required to file audited annual reports with the SEC onForm 10-Kfollowing the end of afiscal yearand unaudited reports onForm 10-Qfollowing the end of a fiscal quarter. These companies announce earnings and generally hold an earnings call quarterly.

Some companies with shares publicly listed also haveAmerican Depositary Receipts(ADRs) that are traded on US stock exchanges and are required to file Forms20-Fand6Kwith the SEC. They are likely to have their earnings announcements and calls coordinated with the schedule required in the country where their shares are traded.

External links

• "Transcripts".Seeking Alpha.Recent earnings call transcripts.
• "Earnings Call Transcripts".Seeking Alpha.Recent earnings call transcripts. Information directly from the company on their operating performance.
• Earnings Conference Call Best Practices.Communique Conferencing Blog.September 4, 2019.