CFF Insights – Quarterly Earnings Or Not. That’s the Question…

A trend evaluation by the consultants and media analysts of CFF Communications regarding the quarterly earnings practices of Dutch listed companies.

By Teun Verhagen and Klaas Kruijer – April, 2019

Introduction

Mid-April. It has always been the time in which trading updates and quarterly earnings give investors a first glimpse of the performance of listed companies over the current year.

But ever since January 29, 2016, Dutch listed companies no longer have the obligation to inform financial markets about their results on a quarterly basis.

There are various considerations for publicly-traded companies to disclose financial performance indicators to investors on a quarterly basis. Nobody wants to be the odd one out, but the behaviour of other companies is not the sole consideration when it comes to determining whether or not to publish full quarterly earnings or trading updates.

“In addition to company-specific issues such as cyclicality of operations, the targeted composition of the shareholder base and the interaction with that shareholder base may affect the decision whether or not to publish on a quarterly basis. The decision will therefore be different per company,” senior consultant Klaas Kruijer concludes.

At CFF Communications, we’ve looked into the status quo three years later: are listed companies still opting for the full quarterly earnings report, without a legal obligation, have they trimmed down into a quantitative trading update, or stopped informing the market on a quarterly basis all together.

Key findings

• Our survey shows that Dutch corporates have not completely moved away from giving journalists, investors and analysts a quarterly glimpse into their financial performance.
• In the AEX index, most (14) companies still published a full quarterly earnings report, while six of them publish a trading update and 4 companies do not publish a quarterly report at all.
• In the AMX index, the trading update remains the most popular choice, with 14 companies opting for this decision, while 11 companies opt for the full earnings report.
• In the AScX index, a majority of the companies opts for a trading update, while only 2 companies publish a full earnings report.
• The number of companies that choose to provide investors with information only every six months remains relatively limited, although it is higher among small caps.

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