PR and investor relations pros are regularly called upon to develop press releases that cover quarterly financial results. With each release, public companies must deliver not only vetted, legally-required financial information but also a fact-based view of corporate news and developments, helping to frame the story of a company’s relative success or disappointing performance in a given quarter.
Of course, earnings releases need to deliver key financial information, which is represented by an abstract of the company’s Securities and Exchange Commission (SEC) Form 10-Q. These abstracted facts usually include earnings per share (EPS), earnings before interest, taxes, depreciation, and amortization (EBITDA) and other data from the company’s income statement, balance sheet and cash flow statements. Presenting financial data should be done in a straightforward manner, formatted in such a way that the information flows for easy reading by a wide variety of audiences, including financial professionals, retail investors, customers, employees, partners, and other company stakeholders.
To PR/IR pros, we suggest presenting quarterly financial highlights in easily-digested bullet form, as well as providing full-year financial highlights for clarity, typically in the same manner. Formatting, including the use of bullets and bold text, can be used to summarize and highlight key facts and/or important issues. These highlighted facts should be significant and of interest to investors, such as accomplishments like new executive moves, increasing headcount, key customer wins, or new, value-added intellectual property developments.
In addition to illustrating progress, earnings releases must contain SEC-mandated legal disclosures such as the Safe Harbor Statement. Other “must-include” information consists of the company’s financial outlook, as well as essential details on timing of the earnings conference call and/or webcast and the company boilerplate and media contact information.
Of special note for earnings releases is the use of CEO and CFO quotes. While CEO quotes are important to show leadership and vision, they may often come off as boastful or full of cliches that add little value to the overall presentation. In many cases, we find that using a quote from the CFO can add value around financial metrics, as well as complement and balance CEO “fluff.” According to an excerpt from this CFO Dive article, “CFOs are the obvious choice to be a company spokesperson because they’re less prone to gaffes or huge egos” and because “CFOs are typically polished from investor or finance meetings and are likely to provide measured responses naturally.” And we agree.
Overall, a well-crafted earnings release can deliver value on a number of fronts – not only conveying financial data but also serving as a vehicle to provide context to the markets and even offering the potential to advance a company’s brand. And in the event of an earnings miss or some other negative factor, an effective earnings release can help minimize negative repercussions, thanks to careful explanation of the issues at hand. The best earnings releases are clear, concise, well-organized, and transparent, ultimately helping to provide investors with confidence that a company is on a good path, despite any short-term hiccups.