Managing quarter-end chaos

Sep 29, 2020
How IR teams can use technology tools to help streamline earnings call preparation

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Preparing for the end of the quarter is always a busy time for investor relations professionals. Public companies are required to provide a quarterly update on their business performance no later than 45 days after the end of the quarter, and preparing the materials and messaging for the earnings call is no small task. 

Since the Covid-19 outbreak, the task has become more complex from both a messaging and a logistics perspective; IR teams often have to deliver a faultless earnings call while their management team is dialing in remotely. In this blog post, we will provide advice and tips from IR practitioners and advisers about how to make the process run smoothly. 

Know your story

As your colleagues in the finance department crunch the numbers, it’s important to get a good grasp of the chatter that exists about your company. Many IR professionals start out by reviewing the analysts’ notes that have been written about their company to gauge the sentiment coming out of the sell side. This can help identify areas of the story that need further explanation, elaboration or emphasis. 

It’s also useful to consult the notes in your own customer relationship management (CRM) system. By keeping an accurate and searchable record of the questions your investors and analysts asked during the quarter, you can better understand how to shape your messaging. ‘We’re trying to use our CRM as more of a sales tool,’ said Katie Royce, global head of investor relations at Cognizant, during a recent webinar. ‘I create topic tags about the questions we’ve been asked most in the quarter so I can use that moving forward.’

Know your peers’ story

As you shape your own story at the end of the quarter, it’s equally informative to know what your peers – and aspirational peers – have said during their recent earnings call and any public investor events. 

Nicole Briguet, account supervisor for financial communications and capital markets at Edelman, recently told the audience at an IR Magazine Webinar about how she helps her clients to use peer analysis effectively when preparing for earnings.

‘At a high level it’s a three-step process,’ she said. ‘Identifying the peer, understanding what the peer is talking about and then analyzing how that information is being perceived… We pull up the peer set and sort through earnings transcripts, analyst notes and media coverage to identify the buckets of information that are discussed – what topics they are discussing, what metrics they are providing and what they are saying in terms of guidance.’

IR teams can add even more value by then comparing their peers’ messaging with how that has resulted in changes in their top shareholders. Through stock surveillance, IR teams can paint a picture of how their peers’ investor base has changed and what that means for their own post-earnings targeting and investor meetings. 

Streamlining processes for effective earnings preparation 

Once your financial results are confirmed, you’ve examined your peers’ messaging and you’ve written the script for the call, there are a number of final steps IR professionals can take to ensure a high-quality earnings call. 

Earnings season itself can be hectic, especially for the analysts who are tasked with tuning in to multiple calls per day. Given the busy schedules, IR teams need to find ways to ensure their messaging stands out. 

Janet Craig, executive director of investor relations and stakeholder communications at Deloitte, spent the majority of her career in corporate IR roles at the likes of Fortis, Loblaw, Nortel Networks and Nexen. During her time running the earnings call process, she learned that it was effective to schedule the earnings release for distribution early in the morning, well before the other companies that had scheduled calls for that day, which she says led to greater attendance and interest in the earnings calls she was running. 

An additional challenge for running the earnings call at the moment is making sure that every participant is comfortable with the technology being used while working remotely. Many IROs have found it helpful to have a second phone line running concurrently, or an instant messaging service so the management team can share its thoughts during the call and co-ordinate responses during the Q&A section. Of course, it’s important that sufficient time is given to testing these systems in advance and ensuring everyone knows how to access them.

By using the many tools available, IR professionals can streamline the end-of-quarter madness and spend more time on the tasks that add significant value after the earnings call: securing the right appearances at investor conferences, planning effective non-deal roadshows and securing meetings with the right investors. Learn more about optimizing your earnings process by downloading The Ultimate Guide to Earnings. 

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