An earnings call is a periodic call wherein management discusses financial performance of a company for a specified period.
According to the definition given by Investopedia, Earnings Call is:
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.
Right now in the United States, there are about 4,000 public companies that are actively traded on NYSE or Nasdaq.
These companies have made the decision to issue securities (in the form of either bonds or shares) to investors--and these investors have a keen interest in decisions being made in the company and how things are going.
And that's why public companies hold earnings calls.
Earnings calls offer public companies the opportunity to share important information with a variety of people, from shareholders to analysts to institutional investors to financial advisors.
Earnings calls can be critical to a company’s short- and long-term success.
The calls, which are typically conducted over the phone in a conference call format and are held at the end of each quarter (four times each year), allow company leaders to highlight great work and growth, put challenges into context, provide perspective during down times, and celebrate success during times of prosperity.
Most, if not all, Fortune 500 companies have teams of communications professionals and big-brain financial analysts who carefully craft the messages, which are then delivered by a company executive.
The calls can easily be considered part art, part science because every word is chosen to present the company in the best light possible, but the sales numbers don't lie--they simply are what they are.
1. For Legal Implications: Public companies are required by law to disclose certain information with people. This includes annual reports, quarterly reports, major events that shareholders should know about, proxy statements and, proposed mergers, acquisitions and tender offers.
Many of these disclosures are made during the quarterly earnings calls.
2. For All Stakeholders' Interests: In the past, earnings calls may have only been of interest to people who owned stock in a certain company, but that's not the case anymore.
These days, investors are joined in their interest by the media, bloggers, financial analysts, financial planners and prospective investors.
They're all looking for opportunities to invest, and they're all hungry for more and more and more information about companies.
3. Increase Reachout: Sadly, not everyone is able to participate in earnings calls, which is why transcribing earnings calls is so important.
Transcribing earnings calls provides companies with the ability to share information in a variety of formats, ensuring that it reaches as many people as possible.
4. Increase Transparency & Credibility: Another benefit is that providing transcripts allows the company to be a lot more transparent, which is something investors expect. The transcription of earnings calls also ensures that there is no confusion over the direction in which a company is heading.
When accurately captured, the words spoken during earnings calls provide clarity, clear up misunderstandings and build a story about a company's history, which can be incredibly valuable to investors and prospective investors.
5. Work as a Record: The written format works as a record for easy referencing and helps in further decision making.
Get Quality Transcripts With A 99% Accuracy Guarantee.
As you know, most earnings calls are conducted over the phone, in a conference call format.
The conference call format is great for allowing many people to listen in on the call, but it really doesn't allow people to analyze the words that have been spoken by company CEOs, CFOs and COOs.
For this, most people--including journalists, analysts, financial planners and even investors--turn to the transcripts.
That's why it's important for companies to secure accurate transcripts and share them in as many places as possible:
Words matter in any format. But written words (those that are transcribed) are incredibly powerful because they allow readers to study, analyze and truly understand an issue.
Earnings calls are among the most important communications tactic organizations conduct throughout the year. They matter to investors and companies alike--and they matter a lot.
They can cause a company's stock price to go up or down. They can galvanize investors' confidence in a company or make investors question the direction in which a company is heading.
Earnings call matter, and so do the transcripts of the conference calls.
That's why it’s so important to hire the right transcription service provider--someone with the skills, experience and track record of success.
The best transcription service providers:
If you need quality transcription for your earnings conference calls, get in touch with GMR Transcription today.