Heard of the concept of earnings call but have no idea why they are important and why stock prices often seem to be affected by these calls?
This article will give you an introduction to Earnings Call and an overview of why you should tune in to them, especially to those by companies that you’re vested in.
What is an Earnings Call?
An earnings call is a conference call or webcast by listed companies to discuss their financial results with analysts, investors and the public.
In an earnings call, companies talk about how much money they made and what their plans are for the future. Management also tells people on the call what they think about important events in the market.
The discussion is usually focused on the financial performance of the company within the current reporting period.
Earnings calls are typically held each quarter after a company releases its financial results. In the United States, companies must report their quarterly earnings within 45 days of the end of their fiscal quarter. Therefore, most earnings calls are held in the weeks following the end of every quarter. Companies may also hold additional earnings calls if there is newsworthy information.
Why should you bother about earnings calls?
By tuning into the earnings call, you can gain valuable insights into a company’s performance and future prospects. You’ll also get an idea of how well the company is performing and whether they are capable of hitting the business goals they have set. And also understand how the management views certain developments in the market.
Share prices tend to fluctuate in the short term depending on a company’s performance during their earnings call. And these short term movements could provide investors and traders with opportunities.
How to listen to an Earnings Call?
It sounds useful, so how can you actually listen or tune in to an earnings call?
Well, there are websites that provide access to live and archived earnings calls, but the easiest way to tune in to an earnings call is through:
- Investors Relations page of the company
Most listed companies would have an archive of their past earnings calls on their investors relations page. They would usually also include the details of any upcoming earnings calls.
Here’s an example from Nike’s Investors Relations page:
Often times, you can also find transcripts on SeekingAlpha post earnings call. There may also be media coverage on the company’s earnings call after the event. However, these coverage tend to focus on the main takeaways.
If you’re vested in a company, attending the earnings call could give you better insights especially to how the management is approaching the business, and get a better feel of the management based on their tone and how they answer questions.
How do I know when’s the next Earnings Call?
Earnings calls are usually scheduled after a company releases its 10-Q or 10-K filings as the discussion would focus on the performance highlighted in the respective filings.
You can get details of upcoming earnings calls from:
- Investors relations page
The best place to find information about upcoming earnings calls is on a company’s investor relations page. These pages typically list the dates and times of upcoming calls, as well as links to listen live or access recordings of past Earnings.
Simply search for the “Company name + earnings call” and you should see the details in the results.
Google compiles upcoming earnings schedule alongside the company’s past 4 earnings performances, which you can easily glance for a general idea of how the company did in recent quarters:
- TradingView’s Earnings Calendar
TradingView consolidates upcoming earnings of listed companies across various markets under its Earnings Calendar. This gives you a birds eye view of all the companies whose earnings calls are due soon.
You can even sort it by “today”, “tomorrow”, “this week” and “next week” so you can find companies whose earnings call you’d like to tune in to easily.
How to Prepare for an Earnings Call
The best way to prepare for an earnings call is to read the company’s latest financial filings. These will provide important context and background information about the company’s performance.
Additionally, it’s a good idea to review any recent news about the company or industry that could impact its results.
Once you’ve done your research, make sure to take notes during the call. This will help you remember key points and capture information that may be useful for future analysis.
Be sure to tune in to Earnings Call from now on!
Earnings calls can be an invaluable source of information about a company. By taking the time to listen, you can gain insights into how the company is performing and how its management views certain developments in the market.
I hope this article has given you useful resources to start tuning in to earnings calls. Good luck in your investing!