Thursday, June 15, 2006

What is a Conference Call

Conference call - A conference call, sometimes referred to as an "earnings conference call," a "quarterly conference call," or an "analyst call," is an event in which investors can call into a special phone number and hear the management of their company comment on the financial results of the recently completed quarter. Most publicly held companies hold four conference calls per year. Many companies are beginning to offer audiocasts of their calls over the Internet.

In the past, these calls were only made available to Wall Street analysts and large institutional investors, but now, more and more companies are actively encouraging participation from individual investors.

Conference calls offer investors a valuable sources of information about a company. During the calls, management will speak about the results of the just-completed quarter, comment on notable corporate developments, and provide insight into the future prospects of the company.

Most conference calls follow a fairly predictable flow. The calls usually starts with the company welcoming participants to the call, followed by a discussion of the business by both the CFO and CEO. Following management's discussion of the business, the call is opened up to questions from the audience.

The question and answer session of the call is often the most revealing. Analysts and institutional investors are usually allowed to ask questions first, followed by questions from other participants such as individual investors. Be advised, however, that not all companies allow individual investors to ask questions. One reason for this policy is that there simply isn't enough time to answer hundreds of questions. But if you're an individual investor, don't be discouraged. If you listen carefully to the answers to the questions that are asked by analysts and institutional investors, your question will probably be answered.

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