Media coverage of earnings announcements was once routine, but many editorial outlets are now decreasing coverage due to shrinking editorial staff and budgets. Notable financial outlets – including Reuters, Bloomberg, AP and MarketWatch – now automate some or all of their earnings coverage.
Understanding how media outlets are changing their approach to earnings
Most news media are evolving their approach to covering quarterly earnings and each outlet has its own nuances but, across the board, news media outlets are covering quarterly earnings less frequently. Some publications, like the New York Times, tend not to write about earnings at all unless there is something unique. The AP and Bloomberg are now publishing short stories about earnings that are written by automated algorithms. At Reuters, most earnings articles are written by a growing team of reporters based in Bangalore, India.
At The Wall Street Journal, a CEO interview can determine whether or not a beat reporter gets involved in the story. At the Financial Times, a team known as fastFT often writes a 300-word first take with basic key information, which may be followed up by a second take within an hour to provide more detail. Other outlets, like Seeking Alpha, welcome contributors’ company earnings content, which receives low editorial oversight.
Given this environment, companies must change their strategy if they wish to generate accurate media coverage about their earnings results in order to effectively promote their corporate story.
Setting expectations up front
Public company C-suite executives often believe their company’s earnings announcement will generate media coverage, regardless of how newsworthy the results are. Communications teams should set clear expectations with their senior executives regarding the probable level of attention the media will pay an earnings announcement, as well as the likely drivers of coverage.
There are several factors that affect the volume of coverage a company’s earnings announcement will generate. In general, the larger the company, the more coverage it can expect. For example, within one particular quarter last year, a $200 bn dollar global retailer’s earnings resulted in more than 60 stories, a $10 bn toy manufacturer’s earnings resulted in 40 stories, and a $2 bn banking advisory firm’s earnings resulted in 10 stories.
Generally, meaningful stock price movement is of interest to financial news outlets. And a company will draw more attention to its quarterly earnings if the announcement contains information beyond just financial results, such as a new product launch, a major shift in strategy or an executive change.
Additionally, communications teams must set expectations regarding the details that earnings stories will most likely include. There are a few elements that appear in nearly all earnings stories: comparison with last year’s earnings of the same period, reference to consensus and whether or not the company beat estimates.When speaking with reporters before and during earnings, companies should anticipate a focus on these issues:
– What is the Street’s consensus?
– What was the company’s performance versus prior year?
– How did (or how will) the stock react?
– What is the company’s performance compared with its peers?
– What is the company’s financial outlook versus street consensus?
Cultivating favorable media coverage
There are several steps a company can take to encourage media coverage of its earnings announcements.
Build relationships. In general, relationships with reporters tend to lead to more coverage, regardless of the outlet. Companies should consistently build and sustain relationships with beat reporters and editors in order to make earnings a higher priority for the publication. Ensuring a reporter is well educated on a company and its strategy will also generally lead to more accurate and favorable coverage when the reporter decides to write.
Don’t underestimate the press release quote. Almost half of earnings stories include an executive quotation from the earning press release, illustrating the importance of spending sufficient time to craft the best possible quote for the release. The second-most quoted source in earnings stories is the earnings conference call.
Consider an executive interview. If possible, give reporters access to executives as it increases the probability of coverage – because interviews generate unique content. An exclusive CEO interview will draw the greatest amount of interest. An interview with a divisional executive can also draw interest, especially if that particular division is less exposed in the media and is a driver of the company’s valuation or future growth.
Develop a unique pitch. Reporters may be more interested in company earnings if they receive a unique pitch angle on performance or strategy, or are able to tie in additional news about the company. Generating breaking news about new products or services alongside company earnings can be an effective way to boost coverage of quarterly results.
Produce supplementary material. Consider providing additional executive quotes from segment leaders, which is often viewed favorably by reporters as exclusive content. Also, producing compelling visuals or infographics that illustrate key aspects of quarterly performance can sometimes boost coverage in online outlets.
Aggressively monitor for errors. Time-starved reporters write stories quickly, which may lead to unintended inaccuracies. Additionally, automated coverage from outlets like AP and Bloomberg may also require corrections, especially if there are unique complicating factors in the earnings announcement, such as Gaap versus non-Gaap reporting and foreign currency impacts. Companies should carefully monitor media coverage of earnings as it emerges and quickly address any inaccuracies directly with the publication.
Lisa McGann is a senior account supervisor and Sarah Braunstein an account executive in financial communications and capital markets at Edelman
