More M&Ms Please

Do you have a process in place ahead of reporting earnings? When it comes to earnings calls, if you don't, you’re inviting needless stress and anxiety.

As with everything, planning well in advance can alleviate most of the anxiety associated with periodic reporting requirements. First, identify the date to report earnings and work backwards with your IR advisor to coordinate timelines, logistics, results and remarks. Internally create a protocol list of who is responsible for specific deliverables and check in periodically to ensure everyone is on task. If a process is derailed make sure everyone knows and work towards getting that task back on track.

Book your call early, before competitors or after, depending on your IR strategy. Draft and issue your press release announcing your intention to announce earnings and the date and time of the call. To avoid scheduling headaches, it helps to pencil in call dates in Q4 of the previous year to avoid last minute conflicts or issues.

Management teams should begin to outline their script as early as possible and work through MD&A’s. While earnings are a fantastic opportunity to present managements’ achievements over the past quarter, be sure to carefully structure the conversation around key messages and organize the highlights sequentially by impact. For those months that didn’t go as expected, consider issuing the bad news first and hopefully, before your competitors. This strategy helps you establish and control the narrative explaining in qualitative detail what happened and why. You can bet that analysts will then grill your peers about the same issue you reported to compare and contrast responses. Be forthright. It will pay dividends later.

Make sure your board is available to meet prior to earnings as this can be a huge bottle neck. Another possible delay may be the auditor, so be sure to actively engage dialogue about your intent to report results on a specific date. When and if your auditors ask for information, turn that information around quickly to avoid delays or worse, postponement of results.

It shall bear repeating: the market hates surprises. Plan accordingly and reduce any margin of error. #IRTips #earningscalls #strategyplanning #investorrelations