Also known as an earnings call, a conference call is an opportunity for investors to hear from executive management of a publicly-listed company once a quarter.
As quarterly earnings reports are required, these calls are scheduled in advance and attended by investors, analysts, experts and journalists.
What Happens During a Conference Call?
You might wonder why these figures cannot be sent via a press release. Perhaps these companies could do a webcast to talk about their earnings, but there’s more to an earnings call (conference call). In the modern age, executives will use a conference call service that may include video, but (harkening back to the old days) there’s audio conferencing so that the call be recorded and heard by all. Video conferencing solutions are helpful if the executive team wants to share graphics or put a face on the figures they’re sharing.
You can add these calls to your event calendar if you are a shareholder or want to learn more about the performance of the business. The earnings release informs a range of people beyond shareholders as reporters and industry insiders also listen to these calls, hear the answers to a reporter’s questions and more. Plus, if you miss the call, you can review the presentation transcript at any time after the call.
So, what happens once the earnings presentation begins?
Generally, a conference call begins with a prepared statement by upper management detailing the previous quarter’s financials, the company’s performance and the firm’s outlook. The report also covers key performance indicators (KPIs) that drive the business’s operations.
The call continues with a review of projected future earnings, guidance and projected growth. You can also expect to hear comments pertaining to revenue growth, margin expansion, financial metrics and profitability.
After a review of the company’s financials, analysts can ask questions of the executive team. Generally, investors only listen to the call to get an idea of how the company is performing. These calls go far beyond a media release, and they might involve members of the board of directors, address questions from specific shareholders and more.
Why Are Conference Calls Important?
Conference calls are a good time for executive management to assuage any fears investors may have, address controversies that occurred over the previous quarter and explain the current direction of the business based on relevant market data.
These calls also give analysts time to ask questions and gather insight needed to make predictions. If you’re reading analyst alerts, some of that information came from — or was gleaned from — an earnings call.
Corporations can also use these calls to share their annual report each year, a document that was once only printed and hardbound for shareholders.
Review Benzinga’s conference call calendar if you plan to tune in or want to know when companies in which you’ve invested are releasing their quarterly reports.
Frequently Asked Questions
Q
Can investors participate in conference calls?
A
Yes, but investors often do not have the floor to ask questions. If investors have specific questions, they should reach out to the corporation directly and await an answer or hope that the issue is addressed on the call.
Q
Are all earnings calls the same?
A
No. Earnings calls vary from business to business, who is presenting the information, the sort of information that is shared and how long the Q&A portion will last. Conference calls be positive, negative, neutral, contentious, joyous, etc.
Q
Are all earnings call shared on video?
A
Not necessarily. Earnings call be occur on video, only on audio or both. The corporation hosting the call determines the format for each call.
