Definition
An earnings call is a teleconference, or webcast, in which a public company discusses the financial results of a reporting period]. The name comes from earnings per share, the bottom line number in the income statement divided by the number of shares outstanding. The US-based National Investor Relations Institute says that 92% of companies represented by their members conduct earnings calls and that virtually all of these are webcast. Transcripts of calls may be made available either by the company or a third party.
Earnings Call
What is ‘Earnings Call’
A conference call between the management of a public company, analysts, investors and the media to discuss the financial results during a given reporting period such as a quarter or a fiscal year. An earnings call is usually preceded by an earnings report, which contains summary information on financial performance for the period.
Explaining ‘Earnings Call’
The term “earnings call” is a combination of a company’s report of “earnings” – i.e. its net income or earnings per share – and the conference call to discuss results.
The term “earnings call” is generally taken to mean a periodic call wherein management discusses financial performance for a period, regardless of whether the company actually has earnings or not. The vast majority of listed companies host earnings calls to discuss their financial results, although small companies with minimal investor interest may be the exception to the rule. Many companies provide a phone recording or presentation of the earnings call on their corporate websites for a number of weeks after the actual call, making it possible for investors who could not log-in to the call to access this information.
Further Reading
- Earnings calls: Exploring an emerging financial reporting genre – journals.sagepub.com [PDF]
- The economic implications of corporate financial reporting – www.sciencedirect.com [PDF]
- Inside the “black box” of sell‐side financial analysts – onlinelibrary.wiley.com [PDF]
- Ethics and ethos in financial reporting: Analyzing persuasive language in earnings calls – journals.sagepub.com [PDF]
- Earnings management: A perspective – papers.ssrn.com [PDF]
- Financial distress and the credibility of management earnings forecasts – papers.ssrn.com [PDF]
- The effect of investment banking relationships on financial analysts' earnings forecasts and investment recommendations – onlinelibrary.wiley.com [PDF]
- Persuasion in earnings calls: A diachronic pragmalinguistic analysis – journals.sagepub.com [PDF]
