Wall Street crisis drives 'pre-releases' of earnings

DES MOINES, IA: Given the continued uncertainty on Wall Street, some companies are "pre-releasing" their earnings in order to protect corporate reputations. It seems particularly important in the insurance space, where the taint of AIG's struggles are touching many.

DES MOINES, IA: Given the continued uncertainty on Wall Street, some companies are “pre-releasing” their earnings in order to protect corporate reputations. It seems particularly important in the insurance space, where the taint of AIG's struggles are touching many.

The Principal Financial Group, which offers financial services and insurance, was one such example. It issued a press release October 13, giving audiences a preliminary look at its Q3 2008 results before earnings are announced in November.

This is the first time the company has issued a preliminary release since going public in 2001. Rick Swalwell, media relations director for The Principal, said that the release helps investors in an uncertain market and reiterates the company's financial health.

“There is tremendous volatility in the markets today, and many companies are seeing their stock prices impacted by negative perceptions and concerns about the future,” he said, in an e-mail. “Our fundamentals remain strong at The Principal.”

Prudential Financial also released its earnings early for the first time.

Bob DeFillippo, chief communications officer at Prudential, said the company was starting to get questions about whether what happened to AIG could happen to it. The company issued an advanced release internally and externally, and filed an 8K on October 9 (earnings will be announced on October 30). Prudential's vice chairman has also appeared in webcasts talking about the company's financial health.

Both Prudential and The Principal have stressed little exposure to AIG and other troubled companies.

“Largely, what we've done to get past the turmoil has been successful,” DeFillippo said. The press release received the second highest number of hits ever in its newsroom, he added.

Outside of the insurance industry, Waste Management, which annually collects nearly 74 million tons of solid waste in North America, issued a release October 13 with an early look at its earnings (revenues are expected to be up), but also announced it had dropped an acquisition plan. Lynn Brown, its VP of corporate communications, says it shows the company is a “disciplined buyer.”

“We've done early releases before, but this was a time when a lot of companies in America are reporting bad news,” she said.

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register
Already registered?
Sign in

Would you like to post a comment?

Please Sign in or register.