Why Organise an Earnings Conference Call?

I did a quick search and quickly came to a conclusion that the earnings conference calls as an Investor Relations activity is catching on in Nigeria.

An earnings conference call is used by quoted companies to discuss financial and operation information with the investment community. In these calls, a presentation team discusses recent financial results, issues guidance regarding expected future performance, and responds to questions. In Nigeria, it would mostly mean quarterly reports and full year reports

Aliko Dangote,President/CEO, Dangote Group

Leading this form of IR communication, however, are the banks.

Why the Banks are the champions of this form of communication may not be unconnected to the fact that they are heavy on institutional investors who are domiciled in foreign countries where such activities are already well established.

The presence of institutional investors immediately demands accountability and establishment of best practices of the financial institutions.

Banks such as First Bank, GT Bank, Access Bank Ecobank, and StanbicIBTC are actively organising regular conference calls. Other banks in this category are, Skye Bank, Fidelity Bank and Diamond Bank. Still others are UBA and Zenith Banks.

But it is not only the banks that observe this ritual, which is already the norm in more advanced economies. Guinness Nigeria plc, ConocoPhillips, Oando, Nigeria Breweries, Dangote Group, and Seplat Petroleum are also in the game.

Also known as analysts call, a conference call provides opportunity for investors and analysts and sometimes, journalists to call in over the phone to hear a company's management comment on the financial results of a recently completed quarter. Most public companies hold four calls per year, usually two to five weeks after the completion of a quarter.

The primary participants in the earnings call are the CEO and CFO. They discuss all of the financial and operational results and projections (if any) of the business. The investor relations officer (IRO) may be involved in the introduction to and conclusion of the earnings call, but otherwise operates in the background or as a discussion moderator.
Earnings calls are usually handled by third party conference calling services that set up phone lines and handle the queue of callers who have questions for the management team. They also typically provide a recording of the entire call; consider posting this recording in the investor relations section of the company website, so that those unable to attention the call can still listen to it at a later date. These posted recordings are usually taken down once a reasonable period of time has passed, so that investors are not listening to out-of-date earnings calls.

References

http://www.accountingtools.com/investor-conference-calls

http://www.investopedia.com/articles/02/022702.asp