Earnings Press Release: 10 Best Ways To Really Ruin It - Part 2
As a follow up to the first mistake – ignoring the power of sequential analysis – I’d like to address another easy way to get it wrong: kicking the earnings announcement process with Word instead of PowerPoint.
Indeed, it has been my experience that starting from a blank Word page may result in missing out on messaging opportunities.
Assuming you maintain your spreadsheets as recommended in the first post, sequential analysis is best supported with graphs and charts. This is particularly true when it comes to illustrating growth or improvement or resilience. Research has long demonstrated the power of visual communication, but many companies still start by drafting the earnings release in a Word document, and then, move on to developing Powerpoint presentation. In case you do not have a presentation to support your results announcement, the recommendation below remains valid.
While the year-on-year comparison will often result in a percentage that is available in your financial tables, a graph or a chart over several periods will illustrate a positive trend worth highlighting or a difficult question worth anticipating, as in the examples highlighted in yesterday’s article. So, instead of writing a factual statement like “sales were up 5% year-on-year”, you suddenly become able to announce that “sales rose for the third consecutive quarter”. I hope you will agree with me that this is more powerful in so far as it puts emphasis on good, consistent strategy execution.
Starting the earnings announcement process with graphs will not only help you develop compelling key messages, but also decide if and where to use them. For instance, you may want to alert the markets to the fact that a given trend should not be extrapolated to the coming months or quarters. Or, on the contrary, use the graphs to support confidence in your company’s ability to resume growth and progress on the path to recovery. In that case, graphs will contribute to delivering exactly these messages if they are available in the conclusion or outlook section. (Stay tuned! I will offer some tips for the outlook section in a couple of days).
These preliminary graphs are also powerful solution to beat writer’s block, as they inherently drive the messaging around your operational and financial performance. You do not have to first develop your entire presentation and only then start drafting the earnings release. Once you have your key messages ready, both deliverables can easily be built in parallel and in a consistent manner.
More fatal mistakes (and how to avoid them) tomorrow….
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