The Q4 earnings period starts in large scale this week, with no less than 30 Nordic companies reporting their results for 2009.
During the latest two earnings periods (Q2 and Q3 2009), a majority of the Nordic companies, not only managed to deliver results in line with the markets expectations, several companies exceeded analysts’ estimates.
The markets estimates for the Q4 reports are obviously haussed to the extent that a result in line with estimates almost will be a disappointment.
Nevertheless, very few have questioned that the positive earnings for Q2 and Q3 is a result of the companies cost effectiveness and capability to adjust after the current downturn. But few companies have so far not giving any signs of increase in net sales or order books.
The equation of haussed profit estimates and thin order books for 2010 can easily tip the causally optimistic market over the edge. On the other hand, the first company that announces an upturn in net sales will be the cheered by the investor community.
With no less than 50 Nordic earnings calls within the next weeks, Nordic IROs will have busy days. The strategy of setting earnings dates is a lottery, if you want to sneak out a bad result it can be useful to report in the same day as giants as Ericsson or Nokia. If you on the other hand want to be cheered and acknowledged for meeting and exceeding the markets expectations, it can be a mission impossible to get the markets attention.
The lessons learned from the credit crunch is that transparency and accessibility are key factors for giving the market reassurance, independent if you manages to meet or fail the markets expectations. Tell the market what you see and provide analysts with macro economical data that supports the company’s long-term goals and strategy.