The Art of the Earnings Call

25 June 2008

Coordinating an earnings call is like conducting an orchestra.  There are many moving parts, some strong players, and some weak links.  One thing is for certain with respect to an earnings call, the stakes are high.Surprised_2

Perhaps the most anticipated and entertaining portion of an earnings call is the question and answer session.  Financial analysts are given an opportunity to fire whatever unscripted question they want at an exposed management team.

You would think that most management teams would want to appropriately prepare for these Q&A sessions, but far too often that is not the case. CEOs edit away on their prepared remarks, making sure to get every word right.  CFOs pour over the financial statements, ensuring that every number is accurate and financial highlights are ready to be disclosed.

But how much time is spent on preparing for the Q&A?

Are the CEO, CFO, and Investor Relations Officer thinking the same way?  Would they answer each question in the same way?  Bottom line – are they prepared for what the Street has to throw at them?

A well crafted and rehearsed call script means nothing if a management team gets slaughtered during the Q&A.

One Response to “The Art of the Earnings Call”

  1. chowsyhuang


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