August 16, 2023

More On Earnings Calls: Post-Mortem Steps to Prepare for Next Quarter

Liz got me thinking about earnings calls with her blog last week on how the Corp Fin Staff uses earnings call transcripts in the disclosure review process. This recent Q4 blog recommends earnings call post-mortems and preparations for the subsequent quarter. With so much attention focused on earnings calls — not just from investors but from regulators — it may make sense to integrate some of these steps into your quarterly process, and they’re a “must” for executives who are new participants on earnings calls:

Following an earnings call, you must assess the performance of your senior leadership team. To do this, review the webcast or call recording, identifying any challenging questions or topics. Encourage each team member to share their thoughts on their performance and areas for improvement. Gathering their valuable insights. You can pinpoint where the team can grow and enhance its effectiveness.

To prepare your team for future earnings events, develop a plan focusing on their needs. This plan may include additional training sessions to address knowledge gaps, Q&A exercises to build confidence, or providing more detailed briefing materials. Additionally, consider seeking support from investor relations consultants or communications experts who can help fine-tune your team’s messaging and presentation skills.

You’ll cultivate a strong and confident group of leaders by consistently evaluating your senior leadership team’s preparedness and taking steps to improve their performance. With this foundation, your team will be well-equipped to tackle the demands and challenges of post earnings events, approaching them with poise and expertise that will impress shareholders and analysts alike.

Liz’s blog also mentioned showing your “value-add” in the earnings release process. If you’re outside counsel, you can still take the opportunity post-earnings to improve your value-add in future quarters by listening to the Q&A and brushing up on how the company, analysts and investors view the company’s business and financial results. And better yet, referring back to the transcript when reviewing the next quarter’s 10-Q, earnings release and call script can help you identify themes and the types of inconsistencies the SEC is looking out for.

– Meredith Ervine