What is an Earnings Call?

The definition of an earnings call is probably well known to you as an investor relations professionals. On the service, the earnings call is the discussion with investors about the results of company actions in the past and what investors can expect from the security in the future.

However, to an investor relations professional, the earnings call is actually much more than a discussion of facts. This call is when you will learn a great deal of the trust that investors will give you in the coming year. Depending on the performance of company stock in the immediate past, you may need to build PR with your investor base. Even if things are going well, investors will want to know that they can trust you to continue to make good moves.

Here are the things that you should really be worried about on an earnings call.

Most of your investors are smart enough to have read the 10K or the 10-Q that you will be discussing on an earnings call. This means that you should not try to hide any of the material in these documents, nor should you try to minimize any problems that these documents bring up. Since most earnings calls these days have question-and-answer sessions, you must expect hard questions about the weaknesses that your quarterly and annual reports bring up. You should also expect that your discussion will be taped and shared online in some form or another. As a matter of fact, past earnings calls are made public by Yahoo Finance no matter who is making them.

You owe it to yourself to be authentic on your earnings call. You also owe it to yourself to be as endearing as possible to your audience, which will definitely grow once the content of the call becomes syndicated on finance channels. A great deal of the leverage that you will have in the coming year will come from the relationship that you build through this direct conversation with your investors. You must take their concerns legitimately and respond to them accordingly. The attitude that you have on an earnings call is the attitude that your investors will attribute to you in your future actions.

In short, the earnings call is not a place to report; it is a place to sell. You will be selling yourself as a trustworthy advocate of your investors. You will also be selling the actions that you made in the past and the actions that you plan to take in the future.

Jeff Ramson is the CEO of PCG Advisory Group and an authority within the Investor Relations industry.