What is a results press release?


The quarterly “earnings season” is a busy time for public companies and their investors as updates on business progress and financial statements are released. The first step is usually a results press release. What is it exactly ? In this Motley Fool Live segment of “Beat & Raise” recorded on October 5, Fool.com contributors Jason Hall, Brian Withers and Nicholas Rossolillo discuss this document.

Jason Hall: Here is that cadence. The company issues a profit release, and sometimes it’s called the profit report, and really, it’s not the profit report. Most companies start with the press release and it gets filed on the SEC 8-K form, which is basically every time a company files something material that it declares on an 8-K. In this case, the press release is just that, it is a press release. They’re going to put some of their finances into it, but it’s also a bit of a marketing document. They will brag about the things that matter to them.

From company to company, the amount of financial data actually disclosed will vary. They’re almost filed with a lot of non-GAAP or adjusted numbers. I would say that in most cases companies tend to lead the way with data that supports both the good news and the message management wants shareholders to convey when they think about it. Some companies actually try to hide, I shouldn’t say hide the bad numbers, but they certainly try to play down the numbers if they’re not good, and adjusted numbers are the way to do that. It’s not always the case. I’ve seen a lot of companies, Starbucks is one that comes to mind, the adjusted numbers they report can often be lower than GAAP numbers. They really try to tell a story about the core business. These are useful numbers, but again, remember this is more of a marketing piece than a financial release.

Brian Withers: Jason, you scored a point at the top. Usually there are a few bullet points at the top, like our posts now, you see, there are a lot of key points. I always love when you can’t find the revenue growth it’s like, wait a minute. [laughs] Either way, added key clients, earnings per share rose sequentially, and to another point. Cash flow remains at an all time high. Wait, [laughs] how much money have you made

Room: I know, absolutely. Nick, I know you don’t like it when I say “pro”, but you put on three different hats. You put on the hat of spreading knowledge for yourself as an investor, managing your own money, as a writer for The Motley Fool, as a contributor here on Backstage, so you watch this information for those audiences. . Then you review this information for the audience of people for whom you are helping manage their investments. What do you think of this first cadence, sir?

Nicolas Rossolillo: Yes exactly. This is really useful information, useful even if it sometimes seems very biased. Sometimes, depending on the company, there really is a lot of bluster on top of it, just look at how much we’ve accomplished in the past three months. But I still think it’s an important document because it’s a hot take on what just happened in the last quarter. When we are a long-term investor and we own shares of a company, part of our business owner is that company. We want this hot plug. Give us a glimpse of what just happened. Often times when news organizations release their quarterly results, they copy and paste what they get from that press release.

Room: It’s a megaphone.

Rossolillo: It’s a megaphone, exactly. Why not just bookmark the investor relations pages of the companies we own and get this high level PR report straight from the source, from the people who manage our assets. The C-suites and the board, we gave them our money to take care of it. I always like to go there on results day and just get the shot straight from management.

Withers: I see it that way too, Nick. I might not have a lot of time to dive in, but I want to know some of the key numbers. How have revenues evolved? How are gross margins? Did they finally get a positive result? Whatever it is, the quick pop, pop, pop, hit the key numbers, and OK, I get it. We’ll see what management has to say, what is the next step.


Comments are closed.