My first job at Dow Jones was on the spot news desk, where all day long we rewrote press releases into wire stories. Earnings season was like organized chaos, 50-60 people sitting around, writing story after story after story, with pressure to turn them around within minutes and get to the next one.
We had these massive printers that would run nonstop for five or six hours at a stretch, churning out the press releases we’d rewrite. You could measure the piles in feet. The pressure was intense, but it was a great crash course in learning how to write fast, tight and accurately.
Tom Middleton was one of the copy editors on the desk back then, and I remember him calling me over one time to go over a story. One of the things I’d written was that such-and-such corp., I forget who it was, had posted “record earnings.” Tom deleted the words; companies, he explained, are supposed to report record earnings, because every quarter, every year, they’re expected to earn more money than the previous year.
That’s profit growth, and that is what investors are paying for. Them bragging about it is superfluous.
I relate this little story because today Alcoa, one of the 30 members of the DJIA, will report 3Q earnings, kicking off the 3Q earnings season. But there aren’t likely to be many record earnings reports this quarter. Mostly, companies are going to be happy to report earning anything. And the extent to which investors accept that depends largely upon how well they manage expectations....MORE