Two-Way Street

Why Earnings are Like Oatmeal

Earnings stories are sort of the oatmeal of the business news diner: It's never going to be a gangbusters offering, but you got to have it on the menu or you look incomplete ... especially that one day when a lot of people want the oatmeal.

And like bowls of oatmeal they can get boring and they will spoiled over time. Yet they are healthy for the business news diet.

You see, every earnings story is pretty much like another, structure-wise:

Lede ... (Company X made Y profit due to some Z thing).

Revenue/profit comparison for the period (Net and operating, in most cases)

What analysts were expecting.


Quote (Usually from the CEO, middle of the press release)

Expectations for next year.

Of course, you can mix the graphs up a little depending on the news cards (raisins) you are dealt. Some companies made need more explanation that others. And some industries may focus on certain financial numbers more than others. (Media companies are hot for EBITDA, for example).

But the stories really follow the same pattern. Gets a little boring stylistically, especially when there are a million of them at once. Also, earnings stories have a very limited shelf-life. Once the numbers are out ... well, that's pretty much the story.

Okay, every once in a while a GE comes out and lots of people want to dig deep. But in these days of expectations management, surprises tend to be the exception, not the rule. (Just look at the tally in our By The Numbers blog).

So is earnings coverage pretty much a wash? I wonder sometimes, especially when your audience only seems to be into the top line numbers. Beyond that, there is a constant debate about the merits of doing a full story ... especially with limited resources.

There is probably a happy medium out there somewhere. A wrap of top line numbers with write-ups of some of the more important companies. That's what we shoot for in our Earnings Central coverage, and it seems to work for our readers pretty well. Of course, there is the constant debate about what the "important" companies are. (Short answer, the ones our readers have money invested in). But that's a broader debate.

In the meantime, hope you are enjoying earnings season and hope we meet your needs.