Tag Archives: Reporting tips
by Liz Hester
With Wal-Mart Stores Inc. reporting “disappointing” earnings Thursday, it’s easy to shrug it off as not that big a deal. Many of Wal-Mart’s core customers continue to struggle in the current economy, making details about sales an interesting window into the broader U.S. situation.
Here are a few earnings details from the Wall Street Journal:
Wal-Mart Stores Inc.’s first-quarter profit and revenue edged higher, but same-store sales at its namesake U.S. stores fell for the first time in seven quarters. The retailer blamed a delay in income-tax-refund checks, challenging weather conditions, and the payroll-tax increase.
While Chief Financial Officer Charles Holley said the second quarter was off to a “healthy” start, he said employment remain customers’ primary concerns and “our consumer is still stretched.”
U.S. same-store sales fell 1.4%, when Wal-Mart in February forecast flat comparable-store sales. “When we provided flat comp guidance for the first quarter, we had expected, among other things, to recover a reasonable portion of tax refunds and had also assumed that customers would follow historical spending patterns with these funds,” said Wal-Mart U.S. Chief Executive Bill Simon. “This did not materialize.”
The importance of tax refunds to lower-income consumers (and to Wal-Mart) can’t be overstated. Here are a few more details from the Reuters story:
Consumers with lower incomes have been especially squeezed by higher payroll taxes, consistently elevated gas prices and a shaky employment recovery.
Shares of the world’s largest retailer were down 2.1 percent, or $1.72, at $78.14 after falling as much as 3.2 percent earlier in the session. The stock had hit a new high of $79.96 on Wednesday.
“We hadn’t seen the business turn around particularly in April,” said ITG analyst John Tomlinson. “That was a concern because at that point you would think tax refunds and lower gas prices would have started to help the business.”
Earlier this year, Wal-Mart said that delays in tax refund checks from the U.S. Internal Revenue Service would crimp shoppers’ spending on discretionary items. But the effects went beyond that, and the drop in refunds pressured shoppers and, in turn, sales at the company’s U.S. stores.
“We do know that the lack of IRS refund checks did hurt our consumers,” Wal-Mart Chief Financial Officer Charles Holley told reporters. “In fact, the IRS, I think, has said that they’ve estimated that there were about $9 billion less in refund checks, and we certainly cashed less of those checks.”
The company forecast earnings of $1.22 to $1.27 per share for its second quarter, which began on May 1. Analysts had been expecting $1.29, according to Thomson Reuters I/B/E/S. The year-earlier profit was $1.18 per share.
Payroll taxes were also to blame, according to Bloomberg’s story:
Unemployment remains “high on the list of concerns” of shoppers surveyed by Wal-Mart, Chief Financial Officer Charles Holley said on a call with reporters today. The U.S. unemployment rate was 7.5 percent in April.
Wal-Mart’s sales slowed in January and February after shoppers’ incomes were reduced by a 2 percentage-point increase in the payroll tax. They also were hurt by tax returns that were delayed because of forms that were shipped late and additional, federally mandated fraud scrutiny.
Jerry Murray, Wal-Mart’s vice president of finance and logistics, said in a Feb. 12 e-mail obtained by Bloomberg News that month-to-date sales had been a “total disaster.” Murray left Wal-Mart last month. Holley said in March that those sales returned to normal by the end of February.
The picture wasn’t great overseas either, according to MarketWatch:
Overseas, a stronger dollar dented international sales by $1 billion. Wal-Mart cited slower personal income growth pressuring U.K. consumers as it cut prices on key food items to lure shoppers.
Without specifying the impact of Target’s entry to Canada, Wal-Mart said consumers there faced higher household debt levels. In its South African market, where it participates through a 51% stake in Massmart, the company also cited cautious consumers. In China, traffic dropped 8% as shoppers consolidated trips. In Japan, “cautious consumer behavior” also was observed.
Holley declined to elaborate on Wal-Mart’s thinking behind not endorsing the Europe-led accord on safety in Bangladesh.
“The key debate will be how much of Walmart’s comp [sales] slowing is temporary” because of weather and deflation or permanent because of such factors as payroll tax hike, said ISI Group’s Greg Melich.
Wal-Mart said it’s seen things improving this month and expects positive U.S. same-store sales this quarter. Investors appear to still need more proof.
It will remain to be seen if consumers and investors return to the company in the second quarter. But it is another piece of the economic puzzle. While some are excited by home sales, many at the lower end of the spectrum continue to struggle to get by and purchase what they need.
by Chris Roush
Brett Arends of Marketwatch.com writes about the problems in the media, and includes one that is particularly an issue in financial journalism.
Arends writes, “In early 2007, when the subprime crisis first blew up, some executives at big mortgage lending companies were going around telling everyone that their companies were okay. But I reported at the time that several of these executives were also quietly dumping stock in their own companies as fast as they could. Six months later one of the companies had plunged into crisis and was sold off cheaply. The CEO was interviewed on TV about the industry. Not once — not once — did the big-name interviewer ask him about the way he had dumped his own stock.
“There’s a reason the interviewer didn’t ask that question. It wasn’t her job. She wasn’t paid to break news. She was paid to get what the TV crowd calls ‘the big ‘get.’’ In other words, she was paid to get access. Her job depends on getting the honchos to come on her show. And to get them to come on her show, she had to promise them — implicitly — an easy ride.
“A few years ago a Wall Street tycoon was so incensed by a plan to eliminate one of his tax loopholes that he invoked the memory of the Holocaust by comparison. He is still welcome on TV channels. He is still invited to give speeches at lucrative media conferences. That’s because he still has money and power, and the media cannot give up their access to him.
“No one who asks tough questions will ever get ‘access.’ And an increasingly powerless media needs access. Work out what will happen.”
Read more here.
by Chris Roush
Jessica Seaman covers energy, Dillard’s Inc., Windstream Corp. and Acxiom Corp. for the Arkansas Democrat-Gazette.
She joined the Democrat-Gazette in May 2012 after graduating from the University of North Carolina-Chapel Hill with a bachelor’s in journalism and history.
She previously worked for The Daily Tar Heel and interned at four newspapers, including the Democrat-Gazette and the Greater Wilmington Business Journal. The other two are The Progress-Index, in Petersburg, Va., in 2010 and The Messenger in Mount Airy, N.C., in 2007.
Seaman spoke with Talking Biz News on Thursday by email about what her first year in business journalism has been like. What follows is an edited transcript.
Why did you decide to take a job in business journalism after graduation?
One of the things I did when I started my job search was email my editor from my internship at the Democrat-Gazette to see if any positions had opened up at the paper. Initially, I was looking for a job on the city desk as that was where I had interned, but there wasn’t one open at the time. I was told there was an opening on the business desk for an oil and gas reporter. I decided to apply because I thought the beat would be interesting to cover and the opportunity would allow me to develop new skills.
What formal, or informal training, did you have in business reporting?
The only training I had in business reporting was a semester-long internship at the Greater Wilmington Business Journal in Wilmington, N.C., in 2010.
With no training, how did you learn to cover your beats?
I learned to cover my beats by using skills I had already developed through school and internships. The first thing I did when I started the job was to talk with the Oil and Gas Commission to learn more about the history of the industry in the state. And when Dillard’s, Windstream and Acxiom were added to my coverage I met with each of the companies’ spokesperson and toured their headquarters. Also, before I moved to Little Rock I reached out to professors to for advice; Sarah Cohen, who was lecturing at Duke at the time and co-taught one of my classes, gave me some really good tips.
What was the hardest thing to get up to speed on?
The hardest thing was learning about all the documents public companies file.
How helpful have your co-workers been in improving your skills?
The reporters and editors here have taught me a lot. My editors have guided me but they also give me room to explore new story ideas.
What else did you do to learn about your business beats?
In my first month at the paper, I invested a lot of time in learning about the oil and gas industry in the state. To do this I spent a lot of time talking with companies. One of the companies even took me on a tour of a drilling and fracking site — I got to climb a drill rig to see how it operates!
I also met with homeowners who live in the counties where the Fayetteville Shale is located and spent a lot of time driving around the area to get a sense of the communities and how big of a presence the industry had in the area. By doing this I was able to find out (and write a story about) that companies were scaling back drilling in the shale and moving to operations to other states.
How helpful have the companies been that you cover?
Most of the companies have been willing to meet and talk with me.
If you could go back and do it all over, what would you do differently?
I would have taken a business reporting class at UNC. I had wanted to take at least one while I was there but I wasn’t able to figure out how to make it work with my schedule.
What advice would you give to someone starting in business journalism today?
My advice is to get out of the newsroom and meet your sources in person and develop a good working relationship with them. Sometimes, when you are covering business, it can become too easy to stay in the newsroom, so get out and find a story.
Do you see yourself staying with business reporting?
I think with the way the industry is right now, reporters need to be as versatile as possible and not limit themselves to one area of reporting. My career goal is actually to become a foreign correspondent and I think the skills I have developed as a business reporter will help me achieve that goal.While I want to cover conflict zones, I can also see myself as a business reporter in London, or another foreign city.
Why do you like the beat?
I like my beats because they are so diversified. One day I can be climbing a drill rig in 100 degree heat and the next I’m at Dillard’s headquarters interviewing buyers and designers.
by Chris Roush
Last week, ProPublica and NYU’s Arthur L. Carter Journalism Institute hosted a discussion on the 2008 financial crisis and how, if at all, it impacted our panel of top Wall Street journalists – both their outlook and their work.
The discussion included Jesse Eisinger, ProPublica; Chrystia Freeland, Reuters; James B. Stewart, New York Times; and Megan McArdle, Newsweek/Daily Beast. It was moderated by Felix Salmon of Reuters.
by Chris Roush
Gwen Moritz of Arkansas Business writes about how she become a banking reporter.
Moritz writes, “Several things contributed to my journalistic evolution, starting with my desperation to get away from a boss who modeled himself after Captain Queeg. The day my editor at the Nashville (Tenn.) Business Journal told me that I was now a banking reporter literally changed my life.
“The first bank story I covered, in the summer of 1992, was a press conference announcing that a bank from Birmingham called First Alabama was entering the Nashville market by acquiring a small mutual savings and loan. The reporters for the daily papers — back then, Nashville still had The Tennessean in the morning and the Banner in the afternoon — were asking questions about ROA and ROE, and I was taking notes as fast as I could and putting question marks by everything since I had no earthly idea what those letters stood for, much less what they actually meant.
“If I knew then what I know now, I would have asked a whole lot more questions about what the depositors in that little mutual S&L were getting out of the deal. Instead, I followed up on a tossed off comment by one of the First Alabama executives about hoping to reach $500 million in assets in Tennessee within a year.
“I didn’t even know what a bank asset was. But I used the Tennessee Bankers Association directory to call about two dozen bank presidents around Nashville and asked them if they were being courted by First Alabama. I was too naïve to realize that no banker would answer a question like that. Fortunately, four of those bank presidents were equally naïve and confirmed that they were in talks with First Alabama, which, you know, is now called Regions Bank.”
Read more here.
The quarterly earnings call is much more than a casual conversation among a company’s executives, analysts, investors and the media — it’s a carefully scripted dialogue that is practiced well in advance of a call.
The planning and preparation that goes into an earnings call allow little room for journalists to fire questions that may throw an executive off message or make them appear ignorant about a topic in front of a large audience that has the power to push a company’s stock price upward or send it plummeting.
In fact, many publicly traded companies ban business journalists from asking questions during the call at all, and direct them to a specific public relations contact following the call for any follow-up questions. However, oftentimes analysts are permitted to ask questions on the live call.
So, then, why are business journalists prevented from asking executives questions during the call? And why are analysts allowed? Is this a smart tactic?
An Exclusive Club
Prior to 2000, quarterly conference calls were primarily reserved for large investors and analysts, and journalists, along with small investors, were often not even permitted to join in the earnings call. Many companies participated in selective disclosure during these calls, giving some investors an advantage over others.
However, in 2000, the U.S. Securities and Exchange Commission (SEC) mandated through Regulation Fair Disclosure (FD) that publicly traded companies must disclose material information to everyone at the same time. Therefore, publicly traded companies were forced to open their earnings calls to everyone, including journalists.
Even though others are now allowed to dial in and listen to these calls, there is still a sense of exclusivity, and the companies frequently cater to a select group of listeners.
The company earnings calls are held for the benefit of institutional investors and analysts covering the company for investment banks, Sapna Maheshwari, a business reporter at BuzzFeed said in an email on Thursday. The analysts, she said, who ask questions on the calls typically represent this cohort of people, which is why they are provided with greater access.
“Analysts often ask a lot of softball questions and offer many congratulations before saying anything on the calls,” Maheshwari said. “They are often scared of losing access.”
Investor relations practitioners anticipate the type of Q&A from analysts, and rehearse the questions with executives in advance. Further, some companies screen analysts in advance for the questions that they may ask through one-on-one emails and phone calls, according to an article from Inside Investor Relations. The investor relations team then often prepares a documented and suggested answers for possible questions that may come up during the Q&A portion of the call.
It’s possible that companies are better able to anticipate the questions analysts may ask, and that they allow them greater access for this reason. This isn’t to say that analysts won’t fire pointed questions; many have on occasion.
Lois Boynton, a professor at UNC-Chapel Hill’s School of Journalism and Mass Communication and former public relations professional, offers additional reasons for why companies provide analysts access to top executives during earnings calls while barring business journalists.
“One argument is that they just don’t want to answer the business journalists’ questions,” Boynton said in an email on Thursday.
“The reputation journalists have for being adversarial probably doesn’t endear them with companies. My guess is that the argument would be couched as their desire to use the limited time they have to talk with those who make decisions [analysts] and who they may feel are better informed.”
Adversarial topics are ones that public relations professionals take painstaking measures to avoid during conference calls that are being closely monitored by those who have the ability to influence the market, and why so much preparation goes into calls. One slip-up could have a significantly negative effect for a company.
Boynton also provided an alternative explanation, and said that companies may also not want journalists asking questions because they don’t want analysts to hear their questions and be influenced by them.
“What is the journalist asks something that could call the company’s reputation into question,” Boynton said. “Would that affect what the analysts do?”
Many companies justify the practice of not allowing journalists to ask questions during the earnings call because they defer them to the public relations department following the conference call, Boynton said.
Working at Bloomberg News last summer, I found this often to be the case. Some companies, Yum! Brands Inc. in particular, were excellent at fielding questions from reporters immediately following an earnings call, while it was nearly impossible to get in touch with others.
“There’s a misconception that is reinforced when the company shuttles the reporter to the PR person – the message is that the public relations person’s role is to keep journalists away from those sources who can answer their questions,” Boynton said. “Although there are PR practitioners who have that role, most see their role as opening doors to the exec level.”
One of the only companies that allow reporters to ask questions during the actual call is News Corp., hosting separate sessions for analysts and journalists to ask question.
“I haven’t run across companies that allow journalists to ask questions on what I cover [retail],” Maheshwari said. “In fact, there is only a handful of companies that are good about putting me in touch with executives.”
Should more companies open up earnings calls to journalists and be more transparent, like News Corp. or is it smart to limit questions to analysts during these sessions?
by Chris Roush
Brian Stelter of the New York Times talks with Chris Ariens of TVNewser.com about how he got started covering the television industry and parlayed that into a job at The Times.
by Chris Roush
Andrea Williams of MediaBistro.com interviewed All Things D’s Kara Swisher about how she covers the technology beat.
Here is an excerpt:
You’re known for breaking stories and getting scoops before anyone else. Which one are you most proud of or excited you the most when you were writing it?
I’m pleased, obviously, with some of the stories around Yahoo! and the different CEO problems that they had. I think one of the things that was difficult then is that people kept saying I was wrong — and then I was correct. So that’s nice. I think it’s the consistently being accurate that’s heartening for us on our site. There’s so much speculation and rumor mongering, that it’s really nice to stick to getting it right every time. We really spend a lot of time on building relationships. And so when everyone is like, “How do you break so many stories?” it’s because I build relationships. I do it the old-fashioned way, and I build sourcing relationships, and then I take advantage of those relationships over time. So, whenever someone says, “Oh, how do you do it?” I tell them that I make more calls then they do. I don’t think it’s that big of a deal. People make a bigger deal of it, but I think I just work harder than other people. That’s all. There’s no secret sauce or anything.
How can other journalists become influential in their own reporting?
Well, it’s really easy. Be accurate; know your stuff. I think what’s really amazing is that people just jump into it without any kind of expertise. People just start mouthing off on things or printing rumors without doing any checking, and they think that’s the way to glory. It’s the way to laziness. And I think the way to be an influential journalist is to be accurate and to be fair and to get things right and to really characterize things in an honest way, versus being really snarky or cheerleading. There’s sort of a happy medium between them, where you’re excited about some of the things, but at the same time, you want to give the reader the truth because this stuff can get hyped pretty quickly.
Read more here.
by Chris Roush
An anthology Malcolm Gladwell has called “riveting and indispensable,” The Best Business Writing 2013 is a far-ranging survey of business’s dynamic relationship with politics, culture, and life.
This year’s selections include John Markoff (New York Times) on innovations in robot technology and the decline of the factory worker; Evgeny Morozov (New Republic) on the questionable value of the popular TED conference series and the idea industry behind it; Paul Kiel (ProPublica) on the ripple effects of the ongoing foreclosure crisis; and the infamous op-ed by Greg Smith, published in the New York Times, announcing his break with Goldman Sachs over its trading practices and corrupt corporate ethos.
Jessica Pressler (New York) delves into the personal and professional rivalry between Tory and Christopher Burch, former spouses now competing to dominate the fashion world. Peter Whoriskey (Washington Post) exposes the human cost of promoting pharmaceuticals off-label. Charles Duhigg and David Barboza (New York Times) investigate Apple’s unethical labor practices in China.
Max Abelson (Bloomberg) reports on Wall Street’s amusing reaction to the diminishing annual bonus. Mina Kimes (Fortune) recounts the grisly story of a company’s illegal testing—and misuse—of a medical device for profit, and Jeff Tietz (Rolling Stone) composes one of the most poignant and comprehensive portraits of the financial crisis’s dissolution of the American middle class.
To order, go here.
by Chris Roush
Two conversations I’ve had this week about board members of publicly traded companies have got me thinking about directors and business journalists.
The first conversation was with a student in my “Business Reporting” class.
Each student in the class has to write a final project paper on a publicly traded company here in North Carolina. I encourage them to talk to as many people as possible, from company executives to analysts to investors to customers to, yes, members of the board of directors.
The student told me that she had found a board member of her final project company was a business school professor. She had approached him for an interview, but he declined. She couldn’t understand why he didn’t want to talk.
The second conversation was with someone who has been on a number of boards, including at least one Fortune 500 company, over dinner and drinks last night.
He wondered why, in the coverage of the departure of the J.C. Penney CEO, there wasn’t any mention in the stories about its board of directors — whether any of them had retail experience and who among them was the leading force in making a change in the executive suite. He noted that he had yet to see a board member quoted.
All of this leads me to wonder why companies, especially publicly traded companies, put such a lid on having their board members talk to the media.
Board members, above anyone else, should be great people to put in front of business journalists. They are the ones who know the company’s strategy and what the CEO is trying to accomplish. Whether the strategy is good or the CEO is being fired, these board members — particularly outside directors — are the most objective sources that a company can have, or that a business reporter can interview.
Yet I know of few companies who allow their board members to talk freely to the media. Virtually all of the time that a business reporter called a board member, the director refers the journalist back to the public relations staff. As a result, they come off as being afraid to talk, or ignorant of what is really going on at the company.
Why would seeing board members quoted in stories be good? Let me give you an example.
In 1997, I covered the Coca-Cola Co. for the Atlanta Journal-Constitution. CEO Roberto Goizueta was diagnosed in September with cancer, which was a big story. He had been the CEO for 15 years and had led the company to great success. The question was what was going to happen to the company if he should die — and he did die two months later.
I called a Coke board member, SunTrust’s Jimmy Williams. He had visited with Goizueta in the hospital, and his comments to me, which I included in the story, were reassuring to investors in the company who were likely nervous about its future prospects.
That’s unlikely to happen today. In the 21st century, in the wake of Enron, WorldCom and other corporate scandals, directors don’t want to talk to the media. They’re afraid their comments might be misconstrued or that they will come off ignorant about what’s going on at the company.
I say that’s bunk. If you’re a board member of a company, you should be willing to stand up for it, talk about it with the business press. By doing so, the public will have a better understanding about what is going on at the company.
And the company’s relationship with the business media will be less adversarial.