If you ask people who have worked with me in the past, I am militaristic in my approach to earnings. For me, like most things, it is 95 per cent preparation and 5 per cent expertise and strategy. I have constructed an earnings survival guide that I have used to good effect.
(By the way, I am hoping readers will help me out and provide some of their earnings insights – what works or doesn’t work for you. That way I can hold on the faint hope that someone is reading this!)
1. Get a good supply of chocolate and candy for the office
It’s crucial for team motivation – who hasn’t had chocolate as a dinner replacement on occasion?
2. Set up preparation meetings a quarter in advance and prime your calendar
Every company has its own rhythm. I have found that five prep meetings are what it takes to generally nail it. It starts right at quarter-end, presenting to management recommendations for messaging and bringing up any issues or concerns, and ends with dry runs.
Base your meetings on timelines from finance – when is the first glance of the financials ready?
3. Conduct daily 15-minute calls for the two weeks prior to earnings
These are amazingly effective, involving the head of IR, head of financial planning & analysis, head of tax, the controller, head of legal and head of corporate communications. It’s good to also include other team members from each department.
These brief calls allow you in a very short time to highlight issues, discuss them and get a resolution instead of chasing people around all day. Do them first thing in the morning and then everyone has his or her marching orders for the day.
4. Key messages sheet
I am of the view that there are only three to five things that matter each quarter. It is IR’s job to identify what these are and make sure we are well prepared to answer questions with respect to them. If you get the issues right, you go a long way toward determining how the Street will receive the results.
5. Work with corporate communications early and often
Make sure you are in sync with corporate communications: ensure IR and corporate communications understand the issues and develop documents in tandem with each other.
6. Make checklists
Ask my staff: I am the queen of checklists. For earnings, these include, but are not limited to:
The binder – this is what keeps me all together in earnings prep
The list of lists – yes, really. It lists every single document that gets placed in the earnings binder for use by the IR team and the CEO and CFO. This is the only package executive management will use when preparing for earnings, so it needs to be complete
Spreadsheets – with all analyst estimates, target prices, consensus figures, and so on
Updated shareholder list – with current holdings, contact information and a list of meetings with them over the past six months
Call lists – for sell side and buy side post-earnings calls
Guidance or colour statements – everyone anyone made in the last two or three conference calls/earnings releases.
7. Double check everything
Double check all conference call lines, test equipment, ensure redundancy in the system and do a technical dry run the day before earnings. Paranoid? Maybe. Necessary? Yes.
8. IR holds everyone prisoner
At times it has been confusing for the team of people working on earnings to know when it is OK to go home. We have made it easy. If you are on the earnings team, you are not allowed to go home until IR says so. That means when the earnings release has been signed off and embargoed, the slides are ready and the prep material has gone to print.
Janet Craig is an experienced investor relations officer, having spent the last 15 years working in publicly traded companies, including heading up investor relations at Nortel Networks and ATI Technologies.