An earnings call is a conference call that connects public company leadership with market analysts, everyday investors, and members of the media. Earnings calls are important to the management and success of a company. In earnings calls, key executives share relevant financial information for the firm's previous quarter or fiscal year.
Earnings call vs. earnings report
An earnings call and an earnings report are certainly related, but they are not exactly the same thing.
Earnings report: An earnings report is a quarterly filing by public companies to report their performance during that period. This typically includes data like net income, earnings per share, earnings from continuing operations, and net sales. An earnings report usually precedes an earnings call.
Earnings call: An earnings call is a conference call to communicate financial information and results of the previous quarter. It may also extend to a fiscal year period.
What happens on an earnings call?
During an earnings call, the company shares financial details including those from the earnings report. Teleconferences or webcasts are common ways of broadcasting an earnings call, and an official press release is usually posted simultaneously or soon after.
SEC forms 10-Q and 10-K in the U.S. are usually part of an earnings report and then shared in the conference call.
Companies often announce upcoming earnings calls days or weeks in advance. Investors, equity analysts, and business journalists are the primary attendees for most earnings calls, which tend to last under an hour.
Key components of an earnings call
Safe harbor statement: A disclaimer limiting company liability of forward-looking statements
Presentation and discussion of financial results: The CEO and CFO (chief financial officer) are present and involved.
Q&A: The company leadership fields questions from participants in the earnings call. Not all individual investors will be able to ask questions, but journalists and analysts are usually able to cover most concerns.
What is the purpose of an earnings call?
An earnings call provides valuable data for equity analysts and investors to help them understand the company and make projections about the future. Earnings calls also provide the chance to analyze company management and even gain insights based on the CEO's tone of voice. Stock prices may drop or rise following an earnings call.
Can you replay earnings calls?
Since not all investors are available in real-time to listen to an earnings call, you can get privy to the company's financials after the call ends. Earnings calls will be available for a few weeks (sometimes even years) afterward.
For UAE investors or any other international investors, it's helpful to be able to access earnings calls for a bit after they end. For example, Abu Dhabi is eight hours ahead of New York, so managing to attend a U.S. earnings call live may be challenging.
Be aware of earnings call announcements in advance and be sure to locate the records soon after the call has concluded. Companies will provide a presentation or a recording of the call, and you can also find the associated press release.
