An earnings call is a

teleconference A teleconference is the live exchange of information among several people remote from one another but linked by a telecommunications system. Terms such as audio conferencing, telephone conferencing and phone conferencing are also sometimes used ...

, or webcast, in which a

public company A public company is a company whose ownership is organized via shares of stock which are intended to be freely traded on a stock exchange or in over-the-counter markets. A public (publicly traded) company can be listed on a stock exchange ( ...

discusses the financial results of a reporting period ("

earnings guidance In financial reporting, earnings guidance or simply guidance is a publicly traded corporation's official prediction of its own near-future profit or loss, stated as an amount of money per share; see Earnings call. Earnings guidance is usually ...

"). The name comes from earnings per share (EPS), the bottom line number in the

income statement An income statement or profit and loss accountProfessional English in Use - Finance, Cambridge University Press, p. 10 (also referred to as a ''profit and loss statement'' (P&L), ''statement of profit or loss'', ''revenue statement'', ''stateme ...

divided by the number of shares outstanding. The US-based National Investor Relations Institute (NIRI) says that 92% of companies represented by their members conduct earnings calls and that virtually all of these are webcast. Transcripts of calls may be made available either by the company or a third party. The calls are usually preceded or accompanied by a

press release A press release is an official statement delivered to members of the news media for the purpose of providing information, creating an official statement, or making an announcement directed for public release. Press releases are also considere ...

containing a summary of the financial results, and possibly by a more detailed filing under securities law. Earnings calls usually happen, or at least begin, while the stock market on which the company's shares are traded is closed to trading, so that all investors will have had a chance to hear management's presentation before trading in the stock resumes. Generally, the call will begin with a company official, typically the Investor Relations Officer (IRO), reading a safe harbor statement to limit the company's liability should actual results prove different from expected indicators reported in the discussion. Then one or more company officials, often including the

Chief executive officer A chief executive officer (CEO), also known as a central executive officer (CEO), chief administrator officer (CAO) or just chief executive (CE), is one of a number of corporate executives charged with the management of an organization especial ...

and Chief financial officer, will discuss the operational results and financial statements for the period just ended and their outlook for the future. The teleconference will then be opened for questions by investors, financial analysts, and other call participants. Management will answer many of these questions, although if the data is unavailable to them they may decline or defer response. Depending on the size and complexity of the company, the difference between actual and expected results, and other factors, the length of the call will vary. There is no general requirement for how far in advance notice of a call must be given. However, keeping the investor and analyst communities happy is part of management's job, so the call will generally be announced a few days or weeks in advance. If the company has a website, then there will probably be a section titled ''Investor Relations'' or ''Investors'', where call schedules and archived past calls will typically be posted. Many companies are tracked by financial analysts that publish estimates of earnings per share (EPS). The company may also provide financial guidance as to what EPS are likely to be. If management knows that its results are going to be significantly different from its guidance or from analyst expectations, it may choose to make a preannouncement of differing results. In 2013, the National Investor Relations Institute (NIRI) published ''Standards of Practice: Earnings Release Content'', available to NIRI members.

United States

If the call occurs within 48 hours of a press release filed with the

United States Securities and Exchange Commission The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against marke ...

(SEC) on

Form 8-K Form 8-K is a very broad form used to notify investors in United States public companies of specified events that may be important to shareholders or the United States Securities and Exchange Commission. This is one of the most common types of form ...

and meets certain other criteria, there is no obligation to separately report the call to the SEC. Otherwise, it must be reported on Form 8-K. If the call contains non-

Generally Accepted Accounting Principles Publicly traded companies typically are subject to rigorous standards. Small and midsized businesses often follow more simplified standards, plus any specific disclosures required by their specific lenders and shareholders. Some firms operate on th ...

(GAAP) information, then there are additional requirements under SEC regulations, including Regulation FD. Companies headquartered in the United States with securities traded on a US-based stock market or other exchange are required to file audited annual reports with the SEC on Form 10-K following the end of a

fiscal year A fiscal year (or financial year, or sometimes budget year) is used in government accounting, which varies between countries, and for budget purposes. It is also used for financial reporting by businesses and other organizations. Laws in many ...

and unaudited reports on

Form 10-Q Form 10-Q, (also known as a 10-Q or 10Q) is a quarterly report mandated by the United States federal Securities and Exchange Commission, to be filed by publicly traded corporations. Pursuant to Section 13 or 15(d) of the Securities Exchange A ...

following the end of a fiscal quarter. These companies announce earnings and generally hold an earnings call quarterly. Some companies with shares traded on foreign

stock exchanges A stock exchange, securities exchange, or bourse is an exchange where stockbrokers and traders can buy and sell securities, such as shares of stock, bonds and other financial instruments. Stock exchanges may also provide facilities for the ...

also have

American Depositary Receipt An American depositary receipt (ADR, and sometimes spelled ''depository'') is a negotiable security that represents securities of a foreign company and allows that company's shares to trade in the U.S. financial markets. Shares of many non-U.S ...

s (ADRs) that are traded on US stock exchanges and are required to file Forms 20-F and 6K with the SEC. They are likely to have their earnings announcements and calls coordinated with the schedule required in the country where their shares are traded.

References

External links

* Current and recent earnings calls of public U.S. companies. * {{cite web, url=http://seekingalpha.com/articles?filters=transcripts, website= Seeking Alpha, title=Transcripts Recent earnings call transcripts.
Earnings Conference Call Best Practices
''Communique Conferencing Blog''. September 4, 2019. Business terms Teleconferencing Corporate finance Securities (finance) Stock market