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Blunting the impact of missed earnings

When a software company trading near its 52-week high faced an earnings shortfall, we advised a proactive communications strategy that included a preemptive announcement, a conference call and a virtual investor roadshow. The approach and resultant messaging helped to maintain the company’s reputation with minimal impact to the stock price.

Client Challenge

Prevent an earnings shortfall from damaging corporate credibility

For seven quarters following its IPO, the company had consistently met Wall Street’s earnings expectations. But as the close of its fourth quarter approached, several large customer orders failed to materialize, while others were postponed until the following year.

Realizing its results would fall short of the analyst consensus, the company sought SMA’s counsel to avert damage to its reputation and maintain shareholder trust.
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The Sharon Merrill Advantage

Pre-release, conference call, and roadshow

SMA worked with management to execute a proactive pre-release of its quarterly financial results. We developed a news release and conference call script emphasizing that the factors causing the shortfall in no way diminished from the company’s excellent long-term prospects. The pre-release and call were immediately followed by virtual meetings with key sell-side analysts and institutional investors. SMA led the development of the messaging, planned the roadshow and coordinated event logistics.


Enhanced management credibility

The conference call drew more than 100 investors and sell-side analysts, 65 of whom participated in follow-up meetings with management. SMA conducted a feedback survey after the event that found an overwhelming percentage of investors appreciated the candidness and willingness to be available for meetings. News articles that appeared on the Dow Jones and Bloomberg newswires and publications, including The Wall Street Journal and The New York Times, reflected the positive messages framed by the news release and conference call.