4 Pieces of Advice for Successful Earnings Calls
Earnings calls are your opportunity to communicate your company’s story to the world. These calls give analysts and investors insight into the progress you’re making on financial metrics and clues about future performance. It’s critical to make these calls count.
Our team has helped countless companies prepare for earnings calls. As a result, we’ve seen great successes, as well as some missteps. To help your company get the most out of your earnings calls, consider these tips from our experts.
Don’t Skimp on Preparation for the Q&A
Caroline Corner
Managing Director
Know your talking points well, and understand how to incorporate them into the Q&A portion of the call. Practice answering questions posed in several different ways, so you can grow comfortable with navigating to your talking points quickly and seamlessly.
Patti Bank
Managing Director
You can’t over prepare for the Q&A portion of the call. Be sure to address tough questions ahead of time so there are no surprises when it’s time to go live. Often, management teams tend to downplay the need to practice Q&A, but preparing for unexpected questions can definitely make the difference between a successful and an unsuccessful earnings call.
To make sure you’re ready for even the out-of-left-field questions, have your associates ask you a wide range of questions. Encourage them to challenge your answers, so you can learn to refine your answers. Ideally, with this preparation, you won’t receive a single question on the call that you haven’t heard and responded to before.
Carefully Plan the Distribution of Your Earnings Deliverables
Mike Piccinino
Managing Director
Management teams should be strategic when deciding the timing of distribution for each earnings deliverable. Two key areas to consider as you develop your strategy:
- Distribute your earnings press release soon after the market closes to give analysts and investors time to review the results before your earnings conference call begins.
- If your SEC filing (10-Q or 10-K) is posted ahead of your call, make sure you proactively address any material disclosures that appear in the filing during your prepared remarks on the earnings call. Management should prioritize transparency to maintain credibility with investors. You should aim to get in front of a potential issue by addressing it during prepared remarks, instead of waiting for an analyst to raise it during Q&A.
Select the Right Date and Time for Your Quarterly Call
Chris Brinzey
Managing Director
There is nothing worse than doing all the important earnings prep work — analyzing the numbers, holding multiple key messaging sessions, writing the earnings script, rehearsing the script and Q&A, and finalizing the release — only to realize that your earnings call is on the same date as 10 other companies.
The obvious impact of overlapping dates is that your call may not be as well attended by your covering analyst and investors as it would otherwise. Because of that, you’ll miss a big chance to communicate your message to your key audiences. While this potential issue cannot always be avoided, we recommend looking well ahead on the calendar to determine the best date and time to hold your quarterly call. Make sure to do a comprehensive analysis at least a month ahead of each quarter and consider the dates and times when your peer group has announced earnings in the past. This may not enable you to eliminate the issue completely, but you will certainly be able to settle on an optimal time to hold your call and ensure the best exposure to communicate your quarterly messages.
Shift to Shorter Prepared Remarks
Robert Uhl
Managing Director
Recently, buy- and sell-side investors have requested companies to “just explain what’s new and what’s most important to drive value.” In response to that suggestion, we recommend reducing the length of the prepared comments on quarterly financial results calls.
Management teams should identify the top three messages they wish to convey on the calls and build the prepared remarks around those points. Anything else can be fleshed out in the Q&A, by providing succinct responses to questions and background or historical context as appropriate.
John Woolford
Managing Director
A number of my clients have shortened the time they spend on prepared remarks to 15 minutes or less. We have received positive feedback from investors and analysts; they are pleased with this pared-down approach. Earnings season is busy for everyone, so being efficient is greatly appreciated.
A well-delivered earnings call can build your credibility and instill confidence in your analysts and investors. The best calls incorporate thorough and careful preparation. Learn more about how to make your earnings call as effective as possible by downloading our checklist, 8 Practices of an Effective Earnings Call.
ICR Westwicke is the largest healthcare focused investor relations firm in the country. We provide customized investor relations programs and independent capital markets advice to small and mid-cap healthcare companies.
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