How Quarterly Earnings Reports Can Help You in Your Next Job Interview
The job interview is almost over and you’ve done well. Soon, you will be able to take a deep, cleansing breath, but hold on just a little longer! It’s not over until you ask for the job but before that final step, you will be asked by the hiring manager whether you have any questions about the position or the company. Of course, you will inquire about specifics regarding the job itself or the hiring manager’s leadership style, but let’s take a deeper dive into preparing questions pertaining to the company’s performance, be it financials, research activities, or product launches.
If you are interviewing with a publicly held company, consider asking a few questions associated with the organization’s quarterly earnings report. These questions demonstrate to the hiring manager that you’ve done your homework and properly researched the company. How your questions are answered will assist you in deciding whether you indeed wish to be employed by the organization. Preparing your inquiries in advance provides you with a critical element of insight into the company beyond the job description you’ve received and enables you to answer any questions that you may be asked.
Younger candidates or new grads may be unfamiliar with a quarterly earnings report. There are gems of information within this report you may want to become acquainted with. Don’t feel you need to eat this elephant report whole, just glean from it what you see fit. So let’s explore a very basic method of examining a quarterly earnings report or listening to the earnings call.
Quarterly earnings reports are a treasure trove of information used by financial professionals, analysts, institutional investors, private investors, and many other people. These reports present a deep font of knowledge for job interview candidates wishing to look deeper into the company they are interviewing with.
Let’s review exactly what a quarterly report is. A quarterly earnings report is a quarterly filing made by public companies to report their performance. It’s a status update letting everyone know exactly the state of the organization. These reports include items such as net income, earnings per share, earnings from any continuing operations, and net sales.
Most publicly held companies will hold a regular conference call, usually once a quarter, after the release of their earnings report. There is no legal requirement for the company to hold an earnings report call, but it is typical. The earnings call is a conference call between the management of a public company, analysts, investors and the media to discuss the company’s financial results during a given reporting period, such as a defined quarter or a fiscal year.
In June 2018, TheStreet.com updated a great article revealing tips for how to listen to earnings calls. A road map of sorts dealing with what to expect in the earnings call, what materials are reviewed and by whom. It is a very good resource for any candidate wanting a window into the in’s and out’s of a publicly traded company.
These calls can be long-winded, so there are a few segments to listen for that can provide you with the information you need to ask pertinent questions and further clarify exactly the companies standing. For most of us who are not analysts, the introduction portion of the earnings call, known as the “commercial” is chock full of information. In this section, you might learn of a product in early development that has performed better than anticipated and is ahead of schedule. This product may be brought to market sooner than scheduled.
The information may be considered “in-line” with the analyst’s expectations of the company in terms of earnings per share and the introduction portion of the call may pass quickly. This means that the company is performing and tracking along with what the analysts research expected and is a positive outcome. It is not good for the organization to “miss expectations.”
If you hear positive announcements in the earnings call, you might ask your interviewer, “I know you all are excited to launch your new product sooner than anticipated. What impact will this have on the bottom line and how will it affect the organization?”
The term “tailwind” may be used during the call. This would be an indication that is positive for the most part. The “winds” are blowing in the direction that would propel the initiative being discussed. Like in an airplane, a tailwind gets you to your destination quicker than scheduled. The opposite of the “tailwind” would be the “headwind”. These “winds” might hamper the progression of strategic initiatives. The “winds” are blowing against the progression. A headwind makes the above-mentioned airplane move slower and use more fuel. You will probably arrive at your destination later than scheduled.
Following the introduction portion, there will be a discussion of the “details”. This portion of the conference call is typically led by the Chief Financial Officer and delves into the actual numbers. If you aren’t a “numbers” person, that’s OK. Listen carefully. You may pick up on things as simple as the voice inflection of the CFO as she or he discusses whether the company exceeded or didn’t meet expectations. This information can be used in a job interview by saying, “During your most recent quarterly earnings report, your CFO stated the company had exceeded expectations. From your perspective, what was a driver of this?”
If during your job interview you decide to ask a question based on the earnings report, use the exact words from the report. Using the company’s own words gives your question credibility, demonstrating your curiosity to the hiring manager. If the hiring manager has also examined the earnings report, he/she may follow up your question with an additional question or comment regarding the report. Any snippet of information you are given is additional insight to the organization you wish to join.
The vast majority of job candidates won’t put the time into investigating a company. It definitely requires extra steps to review the quarterly or annual earnings report. Confident questioning regarding the earnings report reveals your genuine curiosity to the interviewer. It is crucial to differentiate yourself during a job interview and delving deep into investigating the company’s earnings may have you “exceeding expectations” over other candidates. Your extra time spent researching the company may lead you to a “tailwind” of new employment!
I offer a free ½ hour introductory job interview coaching session. Contact me today to prepare for your tomorrow!