By Neil Hershberg, Senior Vice President, Global Media
Frustrated financial journalists are finally speaking out: there is no substitute for a full-text earnings press release. Their irritation at the latest issuer iterations in releasing their results has boiled over on-air, and online. Clearly, the reliable – and resilient -- press release has many staunch supporters in the investment community. With another earnings season drawing to a close, MarketWatch reporters Ciara Linnane, Tomi Kilgore and Francine McKenna explained how earnings reports are often failing to provide investors with the critical information they need in an easy-to-access format.
Nearly a year earlier, Linnane and Kilgore tackled the infuriating tactics common to many earnings announcements. In revisiting the disclosure practices of listed companies, they found that the situation is worse today.
The authors are exasperated by companies that fail to issue press releases, and cite notice-and-access style releases as a particular “pain point.”
“The growing number of companies that no longer put their earnings into a tidy news release, instead distributing a link to their website, which links to a ‘shareholder letter’ that is often a confusion of tables and charts,” the authors write in their most recent report.
The authors also challenged issuers re their release retrenchment in their initial report, noting that reporters are exhausted from all the contortions they need to go through to access key corporate information.
“A growing number of companies have stopped publishing results in press releases that run on news feeds, forcing reporters to click through multiple links to find the data they need,” the authors lamented. “For a reporter trying to get important news to the public as quickly as possible, this method not only added extra steps but forced him or her to contend with a website that slowed significantly as multitudes of people clicked the links at the same time. So why not release the news both ways, so the public can get the news quickly and/or visually.”
CNBC also weighed in on the recent troubling trends in investor relations.
“Squawk on the Street” commentators David Faber and Jim Cramer took several issuers to task for their “newfangled” press releases. They called these earnings experiments “indecipherable,” and that they were designed not to be read. They implored issuers to distribute their news via “an old-fashioned press release.”
Business Wire welcomes the recognition by these leading journalists spotlighting the important role of press releases in our financial markets. Business Wire plays a vital role in delivering earnings and other material news announcements to market participants via its patented news delivery platform, “NX.” In addition to our synchronized delivery, we always include ticker symbols, proper headlines and attribution, tables, and contact information to promote ease-of-use. We properly format and meta-tag releases to expedite their processing by the world’s leading information platforms.
Clearly, there are many exciting and innovative opportunities for investor relations professionals to use new tools to communicate their message.
Business Wire and Edelman Financial Communications & Capital Markets recently announced the results of a new study that supports the use of visual storytelling in earnings reporting.
Among the key finds of the study:
1) The earnings release is considered to be an essential resource for all audiences and provides fast, easy-to-access data.
2) There is still absolutely a need for traditional financial data to accompany the visual elements of an earnings release; it must be clear that these earnings infographics are in addition to, and not a substitute for, traditional earnings statements. In fact, this multimedia tool is most effective when used in addition to traditional releases, focused on quantitative data.
Visual and creative storytelling will most certainly play a larger role in future earnings releases. For now, the Street has spoken: full-text earnings releases remain the backbone of “best practices” investor relations.