Prepping your plan for earnings season

By Flickr user Mish Bradley

Most major publicly traded companies will release first-quarter earnings reports soon, a great opportunity for taking the pulse of the economy and drumming up some fun business features.

Many Q1 forecasts were as optimistic as we’ve seen in a couple of years, so these results will be especially closely watched.

Here’s the Investor’s Business Daily forecast roundup, which predicts an upswing (though admittedly over dismal Q1 2009 figures).

You can find earnings calendars on Yahoo!, Bloomberg News and other sites; I kind of like this one from EarningsWhisper.com.

Ideally, you already know when the major companies on your beat will release, have the conference call marked on your calendar and a request for an executive interview in already.  Refresh your memory by reading the fourth-quarter 2009 releases and any Q1 outlooks published since then; you can compare results with predictions and figure out what went right or wrong according to management forecasts.

The calendars can augment your research by helping you spot release trends.  For example, most of the airlines tend to cluster together over a several-day period.  If you’re reporting on one with local ties, it helps to include the results from others for comparative purposes.

Plus, reading the results of other companies, and listening to their remarks, can arm you with better industry insight and more sophisticated questions for your local executives.  You can bet, for example, that the savvy Ford Motor Co. reporter tunes into the General Motors Corp.  earnings, and vice versa.

Also, the earnings releases of public companies can provide a sort of template to help you interview and report on private companies, which aren’t obliged to divulge financial info.  No harm in asking, however, and understanding the metrics used in accounting within a particular industry (banks vs. manufacturers, for example) will help you know what to ask.

The trend in recent years is to brief earnings or use them for springboards to larger stories.  For example, Family Dollar Stores Inc. is releasing today.  If they had a large presence in my market, I’d consider a dollar-store trend piece.  This could take the form of a consumers-seeking-bargains economy story, or a retail-strategy piece about chains like drug stores and supermarkets including a dollar aisle in their floor plans.

With many family-run chains and individual storefronts trying to compete with nationwide dollar chains, it could become a small business feature.  In any of these stories, the Family Dollar financial results and management commentary could lend insight into the trends in that segment of the retail sector.

For the quirky, poke around on earnings calendars and see what’s happening with household names.  Here’s a piece from February about Hormel boosting its first-quarter forecast.  The brief report just screams with story ideas:  Hormel is the maker of Spam and other canned meats; there’s a potential shopper story, a personal finance piece, the germ of a grocery trend report.

The forecast also alludes to hog prices rising this year. Why would that be, and what else will it affect?  What does that mean for local hog farmers, or their rivals?  Do the makers of Bacos and generic soy substitutes rejoice?

Earnings reports might seem dry on the surface, but you can tease a lot of readable, relevant business stories from amid the numbers.