What is an Earnings Conference Call?

May 17, 2018 | BEGINNER, INVESTING 101

If you own stock or are considering buying stock, you’ve probably heard or read about earnings conference calls.

Many new investors avoid these calls because they don’t know what they’re all about or how to take away any useful information.

This is a mistake. Earnings calls are a way for investors and analysts to hear about the company, its profits and losses, its plans for the future, any problems with the company, etc., straight from the horse’s mouth, so to speak.

During the call, the CEO, COO, CFO, and any other management that is appropriate for the topics covered, talk about the company’s standings and answer questions from investors and analysts. It’s one of the few ways you can interact directly with the big wigs of the companies you invest in.

It’s also a good idea to use these calls as a way to gather more information before choosing to buy a stock.
Even if you don’t have any questions of your own, or don’t know enough to know what questions to ask, you can still benefit from listening to comments from the executives and the questions and comments of other investors.

Besides looking back at previous performance, conference calls are also a great way to learn what the company is planning for the future. While there are no certainties, and companies are careful to issue forward-thinking statements during the calls, they often discuss plans for future growth and development as well as hopes for future profits. This can be especially helpful to investors.

An earnings call can be scheduled anytime. Sometimes companies schedule them during times of exceptional success or to calm fears in a bad economy or in the face of rumors. Most often, however, these calls take place routinely after financial reports are filed with the SEC, quarterly and annually.

The best way to find out when a company will be holding an earnings call is by checking out their investor relations page and by signing up to receive alerts when they issue press releases.