A version of this post previously appeared in IR Magazine.
Media coverage of earnings announcements was once routine, however many editorial outlets are decreasing coverage of earnings due to shrinking editorial staff and budgets. Notable financial outlets – including Reuters, Bloomberg, AP, and MarketWatch – now automate some or all of their earnings coverage.
Understanding How Media Outlets are Changing their Approach to Earnings
Most news media are evolving their approach to covering quarterly earnings and each outlet has its own nuances of note. Across the board, news media media outlets are covering quarterly earnings less frequently. Some publications like the New York Times tend not to write about earnings at all unless there is something highly unique. The AP and Bloomberg are now publishing short stories about earnings that are written by automated algorithms. At Reuters, most earnings articles are written by a growing team of reporters based in Bangalore, India. At The Wall Street Journal, a CEO interview can determine whether or not a beat reporter gets involved in the story. At the Financial Times, a team called FastFT often writes a 300-word first take with basic key information, which may be followed up by a second take within an hour to provide more detail. Other outlets like Seeking Alpha welcome contributor content about company earnings, which receives low editorial oversight.
Given this environment, companies must change their strategy if they wish to generate accurate media coverage about their earnings results in order to effectively promote their corporate story.
Setting Expectations Upfront
Public company C-suite executives often believe their company’s earnings announcement will generate media coverage, regardless of how newsworthy the results are. Communications teams should set clear expectations with their senior executives upfront regarding the probable level of attention the media will pay an earnings announcement, as well as the likely drivers of coverage.
There are several factors that impact the volume of coverage a company’s earnings announcement will generate. In general, the larger the company, the more coverage the company can expect. For example, within one particular quarter last year, a $200 billion dollar global retailer’s earnings resulted in over 60 stories; a $10 billion toy manufacturer’s earnings resulted in 40 stories; a $2 billion banking advisory firm’s earnings resulted in 10 stories. Generally, meaningful stock price movement is of interest to financial news outlets. Finally, a company will draw more attention to its quarterly earnings if the announcement contains information beyond just financial results, such as a new product launch, a major shift in strategy or executive change.
Additionally, communications teams must set expectations regarding the details that earnings stories will most likely include. There are a few elements that appear in nearly all earnings stories: comparison to last year’s earnings of the same period, reference to consensus and whether or not the company beat estimates. When speaking with reporters before and during earnings, companies should anticipate the reporters’ focus on these issues:
- What is the Street’s consensus?
- What was the company’s performance vs. prior year?
- How did the stock react or how will the stock react?
- What is the company’s performance compared to its peers?
- What is the company’s financial outlook versus street consensus?
Cultivating Favorable Media Coverage
There are several steps a company can take to encourage media coverage of their earnings announcements.
Build relationships. In general, relationships with reporters tend to lead to more coverage, regardless of the outlet. Companies should consistently build and sustain relationships with beat reporters and editors in order to make earnings a higher priority for the publication. Ensuring that a reporter is well educated on a company and its strategy will generally lead to more accurate and favorable coverage when the reporter decides to write.
Don’t underestimate the press release quote: Almost half of earnings stories includes an executive quotation from the earning press release, illustrating the importance of spending sufficient time to craft the best possible quote for the release. The second most quoted source in earnings stories is the earnings conference call.
Consider an executive interview: If possible, giving reporters access to executives increases the probability of coverage because interviews generate unique content. An exclusive CEO interview will draw the greatest amount of interest. An interview with a divisional executive can also draw interest especially if that particular division is less exposed in the media and is a driver of the company’s valuation or future growth.
Develop a unique pitch: Reporters may be more interested in company earnings if they receive a unique pitch angle on performance or strategy, or are able to tie-in additional news about the company. Generating breaking news about new products or services alongside company earnings can be an effective way to boost coverage of quarterly results.
Produce supplementary material. Consider providing additional executive quotes from segment leaders, which is often viewed favorably by reporters as exclusive content. Also, producing compelling visuals or infographics that illustrate key aspects of quarterly performance can sometimes boost coverage in online outlets.
Aggressively monitor for errors. Time-starved reporters write their stories quickly, which may lead to unintended inaccuracies. Additionally, automated coverage from outlets like AP and Bloomberg may also require corrections, especially if there are unique complicating factors in the earnings announcement, such as GAAP vs non-GAAP reporting and foreign currency impacts. Companies should carefully monitor media coverage of earnings as it emerges and quickly address any inaccuracies directly with the publication.
Click here to read more about Effective Media Strategies for Communicating Quarterly Earnings.
Lisa McGann, senior account supervisor, Financial Communications & Capital Markets.
Sarah Braunstein, account executive, Financial Communications & Capital Markets.