Tips & Tricks for a Smoother Earnings Report

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Management teams are constantly juggling numerous tasks, and they often look for ways to improve and expedite processes. For public company management teams, reporting quarterly earnings is of critical strategic importance, requiring meticulous thought and consideration. If not planned properly, earnings calls can cause unnecessary stress. This blog post will cover some of the tips and tricks that Gilmartin recommends to management teams for a smoother earnings report.

Reporting earnings may be one of the only times in business where it is recommended to be a follower instead of a leader, as management teams do not want to be an outlier when compared to peers. Considering this, most management teams follow a similar cadence when reporting earnings. Management and their investor relations team should plan ahead and agree on a gameplan to execute.

The first step management teams and their IR partners should consider is the target reporting date. Most public companies follow a historical pattern, i.e., the first Tuesday of the given earnings season. When reporting for the first time, newly public companies should carefully consider the date and time they choose (pre-market or post market reporting). This establishes a precedent for future reporting periods. With this in mind, management and IR teams should begin planning for earnings roughly six weeks out from the target date.

Six Weeks Out from Target Date
The IR team should provide management with an earnings prep calendar. This calendar should include an outline for the initial kick-off call, due dates for drafts of the press releases, call script, and scheduled times for mock Q&A sessions. The IR team should also schedule weekly prep calls with management, as it is critical the process remains on track. At the same time, the IR team should plan to confirm conference call/webcast logistics with the service provider early, given the recent traffic that platforms have been experiencing due to the increase in virtual events compared to pre-COVID times. Furthermore, we suggest preparing the advisory release with a target date of two weeks prior to the earnings call. Even more, the IR team should update the earnings release and call scripts from the previous period. It is essential to start the reporting process early to minimize any scrambling at the eleventh hour.

Four to Six Weeks Out
The IR team will create an outline for the earnings call script, which should consider larger themes and trends from the quarter, as well as a first attempt at guidance. Additionally, the IR team will begin tracking peer and sector earnings dates to stay up to date on market dynamics and sentiment.

Three to Four Weeks Out
At this point in time, teams should create the first iteration of the press releases and the script. Hash out ideas, suggestions, and edits during weekly prep meetings. It is important to remember that not everyone will agree on specific communication and language at this point.

Two Weeks Out
The IR team will review and make any changes to the company’s distribution list which includes covering analysts, shareholders, and anyone management chooses to include.  Once the list is in place, the IR team will issue an advisory press release to update the public when the company will host its earnings call. The IR team at this point should schedule follow-up calls with covering analysts, ideally on the day of reporting when the topic is still fresh on minds of the involved parties. Together, management and the IR team will make another turn on the earnings press release and the script. Additionally, management should begin to consider responses to the question list provided by the IR team. It is important that management is prepared to answer questions confidently and consistently across the board.

One Week Out
The IR team should continue to track sector and peer earnings trends and provide updates to their clients. This helps management make informed decisions regarding guidance, as the company does not want to be an outlier with what they choose to disclose. At this point, the IR team should request financial tables from the CFO to include in the earnings press release. With quarterly trends becoming clearer, management and the IR team should make another turn on the press release and script and confirm the final versions. Additionally, the IR team should touch base with management during weekly prep calls and perform practice Q&A.

An emerging trend among management teams is pre-recording the earnings call instead of reading the prepared remarks live on the day of the call. Pre-recording the script eliminates the stress of performing live and fumbling over words, and it also allows management teams to focus solely on the analysts’ questions the day of the call. We highly recommend this approach. The pre-recording can be done whenever management is comfortable with the script; ideally, it should be completed a few days to a week before the reporting date.

Day of Earnings
The IR team should confirm the final version of the press release and issue it to the exchange the company trades on. The IR team will then host and lead the earnings call, making sure to take notes during both the call and follow up meetings. The team should pay special attention to new investors and analysts and write down any questions they might have.

Following the call, the IR team should provide management with the call transcript, analyst notes and snapshots. In the days to follow, the IR team should provide management with an updated consensus model and IR deck, both of which will be posted to the company’s IR website.

Like anything in business, reporting earnings should be taken seriously and given a great amount of thought and collaboration. With the proper guidance from the IR team, reporting earnings can be a smooth and stress-free process. It’s all about starting early, being organized and executing each step with collective thoughtfulness. Contact our team today for guidance on your next earnings call.

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Oliver Eberth, Analyst




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