DEFINITION of 'Conference Call'

A conference call is an event in which investors can listen to a company's management team detail aspects of the current quarter as well as forward, or projected, earnings growth. The call typically begins with an uninterrupted message from management wherein the chief executive officer, chief financial officer, and other C-level executives greet participants and congratulate the internal team for a great quarter. This leads to a larger discussion about the company's financials and other key performance indicators (KPI) that drive business operations.

For a company like Facebook (FB), Mark Zuckerberg may also address the lingering data and privacy issues dominating headlines these days. After comments from management conclude, the meeting is opened up for questions. While the average investor can only listen to the call, the reporting company will often answer questions from analysts. This type of conference call is also known as an "earnings conference call," "analyst call," "earnings call" or "results-earnings call."

BREAKING DOWN 'Conference Call'

Conference calls are held four times a year, typically after each quarterly earnings announcement. Most of the time, the calls are recorded and broadcast live on the internet. Some services also transcribe conference calls for investors to consume the content through written text. The company management participating in the call usually includes some combination of the CEO, CFO and senior vice presidents.

The CEO may make general remarks about the quarter, any controversy that may have occurred, and some big-picture forward-looking statements. The goal for the CFO and other C-suite executives is to address specific financial metrics that impacted quarterly results. That may include revenue growth, profitability, margin expansion and any KPI specific to the company. For example, Facebook outlines many of these high level numbers in addition to monthly active users (MAU) and ad revenue.

After some time, the operator will open the line with a question and answer period from analysts. Some questions you typically hear on a conference call involve financials, forward-looking statements, and background on business operations.  

Benefits of a Conference Call 

For many companies, the conference call can allay fears created during the quarter or reinforce the message of positive future growth. If a company was the center of controversy, missed analyst's estimates or issued weak guidance, the call is an opportunity for management to address that weakness. It's beneficial for analysts to get the additional background about financial performance and business operations before they change price targets or recommendations.

RELATED TERMS
  1. Call on a Call

    A call on a call is a type of exotic option in which the investor ...
  2. Provisional Call Feature

    Provisional call feature in a convertible issue allows an issuer ...
  3. Call Money

    Call money is money loaned by a bank that must be repaid on demand. ...
  4. Federal Call

    A federal call occurs when an investor's margin account lacks ...
  5. Guidance

    Guidance is information that a company provides as an indication ...
  6. Appeals Conference

    Appeals conference is a conference that a taxpayer can request ...
Related Articles
  1. Small Business

    What Is an Earnings Conference Call?

    The quarterly earnings conference call keeps institutional and individual investors, as well as Wall Street analysts informed on a company's successes.
  2. Investing

    The Flow of Company Information

    Learn how to gather all the pieces before you start to put together your puzzle.
  3. Investing

    Writing Covered Calls On Dividend Stocks

    Writing covered calls on stocks that pay above-average dividends is a strategy that can be used to boost returns on a portfolio, but it carries some risk.
  4. Retirement

    Write Covered Calls To Increase Your IRA Income

    Covered calls may require more attention than bonds or mutual funds, but the payoffs can be worth the trouble.
  5. Trading

    Beginner's Guide To Call Buying

    Learn how to buy calls and then sell or exercise them to earn a profit.
  6. Trading

    Apple As An Example Of How to Use a Bull Call Spread to Trade

    Here's how you can use a bull call spread to trade stocks.
  7. Investing

    Covered Call Strategies for a Falling Market

    Find out how to come out on top, even when the market is dropping.
  8. Investing

    Here's What Happens When a Bond Is Called

    Learn why early redemption occurs and how to avoid potential losses.
  9. Trading

    How To Protect A Short Position With Options (FB, AAPL)

    Short selling can be a risky endeavor, but the inherent risk of a short position can be mitigated significantly through the use of options.
  10. Investing

    Facebook's Stock May Rise By More 10% Short-Term

    Traders are betting shares will continue to soar from its current price of around $200.
RELATED FAQS
  1. When does Q4 start and finish?

    Learn about different financial years used by various companies. Explore when the fourth quarter begins on October 1st and ... Read Answer >>
Hot Definitions
  1. Intrinsic Value

    Intrinsic value is the perceived or calculated value of a company, including tangible and intangible factors, and may differ ...
  2. Current Assets

    Current assets is a balance sheet account that represents the value of all assets that can reasonably expected to be converted ...
  3. Volatility

    Volatility measures how much the price of a security, derivative, or index fluctuates.
  4. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  5. Cost of Debt

    Cost of debt is the effective rate that a company pays on its current debt as part of its capital structure.
  6. Depreciation

    Depreciation is an accounting method of allocating the cost of a tangible asset over its useful life and is used to account ...
Trading Center