With the third quarter earnings season over, it is a good time to reassess your quarterly earnings press release and how it can affect your positioning in the investment community.

An effective earnings release credibly positions a company with the investment community. It maximizes the benefits of good news and minimizes the fallout from bad news. Management maintains and builds credibility, and the company maintains or strengthens its key differentiators – regardless of financial performance.

While the stock of a company that misses its number might be punished over the short term, management credibility and company positioning can be maintained or even strengthened if the quarter’s performance is clearly articulated within the context of management’s longer term business strategy. The key is to address any challenges up front, and articulate over time that management has a track record of successfully executing on strategic intent. A quarterly earnings release that fails to consistently establish, present and characterize the company's financial performance from one quarter to the next erodes investor confidence – and management credibility – over time.

An effective earnings release accomplishes the following:

• Presents pertinent financial information and meaningfully compares it with past performance and future guidance.

  The key financial indicators of your industry should be highlighted consistently from quarter to quarter in terms of both information provided and location within the news release. Having a consistent order of information within the earnings release from quarter to quarter allows investors to quickly find pertinent information.

• Delivers the information in a candid and forthright manner, and follows Associated Press (AP) news style.

  Financial indicators should be comparable to year-ago-period results, and previous-quarter results, where appropriate. And if there are extenuating circumstances (a one-time gain, for instance), these should be explained in immediate context with the results they are affecting, not later on in the copy. Following AP news style indicates sophistication on the part of the company reporting the news, and it reduces the risk of errors that sometimes occur when news releases are rewritten for inclusion in newspapers and other news media outlets.

• Presents consistent financial information from quarter to quarter and year to year.

  Consistency is key. It is not acceptable to include a financial indicator/yardstick for one quarter and then omit it in the next quarter because the comparison is not favorable. This erodes management credibility.

• Positions and characterizes the company’s performance within management’s business plan, against peers and economic factors.

  Characterizing the company’s performance within the context of strategy, objectives and environment helps put the performance in perspective. It helps investors understand the factors driving financial results and builds confidence regarding the company’s future prospects. It also helps position management as industry experts.

• Provides consistent core messaging that supports and strengthens the company’s profile, reputation and brand.

  Ideally, financial performance should be an indicator of the bond/relationship the company has with its key constituencies (employees, customers, shareholders). The core messages should be consistently articulated from one release to the next, providing the reasons to invest in the company.

To view an example of an actual earnings press release we have written, click Earnings Releases.