By Vilan Trub, Business Wire
It hasn’t been a secret for some time that reporters are more interested in simpler, easier-to-follow earnings’ releases. We’ve covered the subject before, even bringing attention to a “Squawk on the Street” segment where commentators David Faber and Jim Cramer took several issuers to task for their “newfangled” press releases.
Several months passed and it’s the same old story again. New articles have been appearing by Ciara Linnane, a longtime critic of confusing disclosure methods, and they plead with those that continue the practice to include a standard press release. By forcing interested parties to have to find the financial data they’re looking for, stress is created by delaying a process that needs to occur in real-time. Peter Cardillo, chief market economist at the retail brokerage First Standard Financial, gave his take on the consequences of the added time it takes to get the information he needs: “by that time, if it’s good news the stock is already up, and if it’s bad news the stock is already down.”
It’s important to revisit the discussion and reiterate the importance of a traditional earnings statement. Although new technology creates opportunities for issuers to communicate their message using multimedia and other tools, assets that are welcomed by journalists and investors, these practices should be applied only in addition to a standard release, not instead of one. Think traditional + visual, not traditional vs. visual.
It wasn’t all doom and gloom however, as among the articles was a positive sign as Kohl’s was praised for providing reporters and investors with a “straightforward” release. Referring to the release, Linnane writes, “coming in an earnings season in which companies continued to irk reporters and investors alike with releases that concealed important numbers like revenue and included hard-to-follow non-GAAP metrics, Kohl’s release was a delight.”