Earnings Calls Gone Wild

May 25, 2018

The quarterly earnings calls of public companies, when the management speaks to financial analysts, are rarely noteworthy events.

By convention and regulatory requirement, the managers try not to say anything new that might rattle the company's share prices. Meanwhile, analysts representing financial institutions often lead their questions with obsequious comments.

The practice is so well-entrenched that phrases like "great quarter, guys" are a longstanding joke on Wall Street. There are even academic studies measuring the number of sycophantic comments from analysts over the years. According to one theory, this behavior is the result of analysts hoping that a company's managers will continue meeting with the analysts' clients, and hence the avoidance of saying something on a public call that will embarrass them.

But sometimes, an earnings call goes wrong — and something interesting actually happens, an event so rare that it's news when it does. Today on the show, some of our favorite examples of earnings calls gone rogue.

Today's episode was inspired by a post at FT Alphaville by Jamie Powell: "Great Quarter Guys!"

A couple of other links we recommend:

Great Quarter Guys: Why quarterly results conference calls must stop

Great Groveling, Guys: Counting All the Ways Analysts Fawn Over Management

Music by Drop Electric. Find us: Twitter/ Facebook.

Subscribe to our show on Apple Podcasts, PocketCasts and NPR One.

Copyright 2018 NPR. To see more, visit http://www.npr.org/.