Do earnings delays matter?
It’s earnings season. With the striking by Superstorm Sandy on the nation’s financial hub, many firms delayed reporting earnings this week. The list included Pfizer Inc, Time Warner Cable Inc., Thomson Reuters Corp., Spirit Airlines, and NRG Energy Corp.
Which raises the question, does it matter that companies delay reporting? And what does it mean for reporters and editors?
First of all, when earnings reports are delaying for major news events – not internal company problems – it seems to warrant little attention. It’s understandable to delay reporting so people have time to put finishing touches on releases and executives can physically get to the office to host earnings calls.
It can be hard for newspapers and reporters. Most coverage, attention and column inches are devoted to covering the storm, clean up and giving the public important – sometimes lifesaving – information. Attention has already shifted to the biggest and dominate story. Of course, news organizations don’t have a load of emergency reporters to cover the news; they only have their staff writers.
That means the Pfizer reporter is probably out working the hospitals and other health care service providers to write those important stories.
Earnings will all get less coverage since they all came out at once. Company news that was spread out for two or three days got jammed into the end of the week. This leaves our already strapped reporters juggling a rush of information. The delays also pushed announcements closer to the election, yet another critical story competing for space.
That said, space on the web is infinite. Wire services such as Dow Jones, Bloomberg and Reuters can publish as much and as often as they like. There is definitely no limit, other than what reporters can physically write, to how many stories these organizations can cover and how in-depth the reporting.
But investors are taking note, no matter when the earnings come out. For example, Pfizer reported a disappointing 14 percent drop in third-quarter profit and lowed its forecast. The stock dropped more than 1 percent on the news.
While it might make life harder for reporter and editors who are already over worked and chasing many stories at once, the delays aren’t escaping attention from investors. And ultimately, that’s who really matters – those buying and selling the stocks.