Management input and audience interaction
The CFO typically has the most influence in preparing remarks for earnings calls, closely followed by the CEO. Just over four in 10 IR respondents cite the CFO as the individual who has the most input in preparing for earnings calls, compared with 36 percent who say it is the CEO who takes the lead.
In North America the CEO typically has the most input, while European companies are the most likely to have key input from the CFO and the least likely to have the main input from the CEO. The likelihood of key input coming from the CEO diminishes as company size increases, with the CFO more likely to hold the reins as market cap rises.
Investors are most interested in hearing from the CEO during earnings calls, followed by the CFO. When asked to rate how interested they are in hearing from different individuals in the company, 89 percent of investors are very interested in hearing from the CEO – giving a rating of 8+/10 – including 60 percent who are extremely interested, giving a perfect 10 score.
This compares with 83 percent of investors who say they are very interested in hearing from the CFO during an earnings call, with 48 percent being extremely interested. Interest in hearing from the COO or chief IRO is much lower, with just under half the respondents expressing a strong interest in hearing from the COO and less than a quarter expressing the same interest in hearing from the chief IRO. A quarter of investors say they have no particular interest in hearing from IR during an earnings call.
When asked how they interact with earnings calls, 85 percent of investors say they listen to them live. Just under six in 10 read the transcript of an earnings call, the same percentage as those who read analyst notes on the call. More than half – 54 percent – listen to the recording of the call, while just 5 percent of investors don’t follow earnings calls at all.
North American investors are the most likely to listen live to the recording or to read the transcript. Asian investors are the most likely to read the analyst notes. The buy side is more likely to listen to the recording or read the transcript or analyst notes than the sell side, which is more likely to listen live.
More than six in 10 investors say they generally ask questions during earnings calls. The sell side is much more likely to do so than the buy side. Asian investors are typically more likely to ask questions than North American or European investors.
Just 7 percent of investors say they don’t follow the questions asked in an earnings call. Three quarters of them follow the questions live and 46 percent follow the questions after the call. Asian investors are less likely than North American or European counterparts to follow questions live, while the sell side more commonly follows questions live than does the buy side.
In preparation for anticipating what questions are likely to be asked during the Q&A section of their earnings calls, more than eight in 10 IR respondents say they follow analyst research, while just over six in 10 follow the earnings calls of their peers. Following peer earnings calls is a more common practice for North American companies than for European or Asian companies. European firms rely more on following analyst research. The practices of following analyst research and following peer group earnings calls both increase with company size.
Just under nine in 10 anticipate business-related questions in their Q&A and just over two thirds expect macroeconomic themes. Fewer European companies anticipate macroeconomic questions, while there is a greater expectation for both macroeconomic themes and business-related questions among larger companies.
