• September 22, 2023

What Is an Earnings Call and Why Should Investors Care About It?

ICan’t help thinking of you Call for Merit like a testimonial for a business. Just as students explain their certificates to their parents at the end of a semester or school year, listed companies meet with investors, analysts and the media to discuss their latest achievements. It’s fair to say that both audiences are pretty intimidating.

Public companies are corporations that sell property shares on the capital market. They use results calls to explain their finances and performance over a period of time, such as the past three months. They will often discuss the highlights in their 10-Q report (a quarterly report) or their 10-K report (an annual report). The US Securities and Exchange Commission (SEC) requires both types of reports from publicly traded companies and reviews the reports to ensure that companies are complying with their standards.

The 10-K is an annual report and gives a much deeper overview of the company than the quarterly report. A company’s 10-K provides the public with vital information about the company including, but not limited to: a description of the company, risk factors to which the company is exposed, company property, legal issues, executive compensation, financial statements, and discussions and analysis of the company Management of the company.

The 10-Q provides a more general view of the company’s financial performance. It compares the company’s last quarter with the previous quarter and the same quarter last year. In contrast to the annual report, this report is usually unaudited, ie an external source does not evaluate the information and does not give an opinion on it.

What can investors get out of a Call for Merit?

A Call for Merit usually happens on the same day that the company’s earnings report is published. Profit talks are held four times a year, and top executives such as the CEO and CFO attend the conference call. Investors can listen by visiting the Investor Relations section of a company’s corporate website dedicated specifically to investors.

Investors will use the information that is on a Call for Merit decide whether to buy or sell shares in the company, while analysts use this information to create a fundamental analysis of the company that examines any aspects that could affect the company’s value.

At the end of a call, executives often ask analyst questions. During this time, a caller can ask a question about company news or clarification on a specific financial number.

close invest wisely Making decisions is critical to participating in these calls for proposals as part of your research process. Take the time to research companies and learn about their industry in general before investing. Take advantage of the wealth of information companies offer, whether by listening to phone calls or by delving into the 10-Ks and 10-Qs.

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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.

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