SOURCE: Marketwire

Marketwire

June 08, 2009 08:00 ET

Journalists View "Notice-Only" Earnings Announcements Cautiously, Marketwire Poll Shows

Referring Constituents to Company Websites for Newly Posted Financial Information Considered by Most to Be Less Transparent and Efficient

TORONTO--(Marketwire - June 8, 2009) - A just-completed poll of journalists in the United States and Canada who follow and report on US public companies suggests that the majority (70%) hold either a "wait-and-see" or negative outlook toward the US Securities and Exchange Commission's (SEC) recent interpretive guidance of Reg. FD that allows public companies to disclose quarterly earnings and material news on company websites. Following this guidance, a company may issue a "notice-only" announcement through a communication channel, such as a newswire, that points to a corporate website (meeting specific disclosure criteria) that houses the financial information. Although some of the editors and reporters surveyed view the development as positive or neutral, most are opposed to it, citing objections such as reduced transparency, outdated editorial news platforms that prevent access to information, concerns that corrections will be missed, and a drop in timely news reporting.

The online survey of a random sample of reporters and editors across North America, conducted by Marketwire in April and May of this year, is part of the newswire's ongoing research to understand how this revised method of disclosure may impact the workflow of companies that distribute material news -- and affect journalists who follow and report on those companies.

Highlights of the Poll's Findings

The poll uncovered valuable information about how journalists access material news and what they find most important in timely reporting:

  • Respondents predominantly access material news through wire services (76.1%) and company websites (77.9%).

  • The overwhelming majority -- 93.8% -- said it is important to be notified directly and on a timely basis, particularly when meeting deadlines.

  • 76.3% of the journalists surveyed said it is important to view financials within a press release.

  • The majority (79.5%) of journalists surveyed consider live links (hyperlinks) in press releases that direct them to supportive content either very or moderately important.

  • 64.3% of respondents believe a company should archive news on its website indefinitely.

  • Concerned about being able to access company websites, 65.2% were unsure if their editorial systems are ready for notice and access reporting.

Free-form questions uncovered additional attitudes about revised disclosure guidelines. The mostly negative themes focused around reduced efficiency and transparency, while positive responses included a caveat that there needs to be a reliable means of timely notification.

  • Because of limited time, journalists prefer to access material news updates posted on third-party, centralized repositories such as newswire websites rather than on multiple, individual company websites.

  • Journalists expressed concerns that this "deregulation" is a step backward in transparency. Many said it will make it difficult to find earnings announcements and even more labor-intensive to find updates and corrections to those announcements.

  • Journalists supporting a notice-only model of disclosure expressed the need for a reliable method of timely notification, such as an RSS feed or email alert.

Jessica Strange, executive director of media relations at Marketwire, considers this study an important step in understanding how the shifting landscape in material news reporting also affects Marketwire's clients.

"Learning how our journalist partners access material news and knowing what they consider important gives us valuable insight into the tools and services that will most effectively support our clients' news distribution needs," said Strange. "Whether our clients choose to continue distributing full-text or move to notice-only press releases, we want to ensure we maximize their news reach as well as facilitate their disclosure requirements."

While the SEC permits companies to use their own websites, it requires those sites to be "recognized channels of distribution" -- namely, websites that companies promote to their investors and the marketplace, and that are regularly accessed and recognized by investors and members of the public. There also has to be a reasonable waiting period for investors and the market to react to the posted information.

"As companies are presented with new options for disclosure, including a possible increased role for posting material information to their websites, we are closely following discussions between industry associations, newswires, financial media, analysts and investors and weighing what each group of stakeholders considers the merits and negative aspects of the guidance released by the SEC," said Michael Nowlan, president and CEO of Marketwire. "I am certain the market will ultimately determine whether the guidance actually adds to the disclosure model, and only time will truly tell that."

Methodology

The anonymous online poll, conducted by Marketwire between March and May 2009, queried editors and reporters located primarily across the United States and Canada on their views and attitudes on notice-only press releases. Of the 117 financial services journalists completing the survey, the majority -- 85.5% -- work for newspapers and trade magazines, with the remainder split between newsletters (17.5%), blogs (15.6%), radio (5.8%), and broadcast/cable (4.9%). The largest group of respondents (47.7%) follow and report on more than 100 public companies, followed by 18% reporting on 31-60 companies, 17.1% reporting on 11-30 companies, 10.8% reporting on 1-10 companies and 6.3% reporting on 61-100 companies.

About Marketwire

The only fully integrated North America-based global newswire, Marketwire, Inc. is a full-service partner to IR, PR and MarCom professionals seeking top-tier press release distribution, media management, multimedia and monitoring solutions. Marketwire's customer-centric corporate philosophy focuses on being the best by infusing every aspect of its business with the following core attributes: precision, adaptability, innovation and simplicity.

Marketwire delivers its clients' news to the world's media and financial communities, fulfilling disclosure requirements in North America in compliance with the Securities and Exchange Commission (SEC) and the Toronto Stock Exchange (TSX), and serving as Primary Information Provider (PIP) with the UK's Financial Services Authority (FSA). With a reputation for technology leadership, Marketwire offers innovative products and services -- including Social Media, Search Engine Optimization, News Dashboard coverage reports, exclusive access to networks such as The Canadian Press Wire Network, Easy IR and Easy PR workflow solutions, and more -- that help communication professionals maximize their effectiveness while ensuring accuracy and best practices. Having merged companies (Market Wire and CCNMatthews) in April 2006, and enjoying a combined history of 25 years of service, Marketwire is now majority-owned by OMERS Capital Partners, the private equity arm of one of Canada's largest pension funds.

Marketwire distributes the majority of press releases issued by publicly traded companies in Canada and serves more than 8,000 clients worldwide through 20 offices on four continents. For more information, visit us at http://www.marketwire.com/.

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