Investor relations professionals are turning to new telecommunications and computer-based tools to add effectiveness and efficiency to their communications with stockholders and the investment community, according to a report released last week by the National Investor Relations Institute (NIRI), Vienna, Va.
Based on a survey of its membership, NIRI found surging use of teleconferencing with analysts, broadcast faxing, e-mail and Internet home pages. The survey is based on 201 telephone interviews conducted in May with corporate IR professionals drawn randomly from small-, mid-and large-capitalization member companies of NIRI.
Looking at conference calls, 73 percent of respondents said that they use these to speak to analysts, compared to a usage by 61 percent of respondents last year. In these calls, multiple analysts are contacted at their offices simultaneously, briefed on a development--such as an earnings release--and given the opportunity to ask questions and request follow up information.
"Conference calling is something that we're using more and more," said Jack Lascar, vice president of investor relations, Tenneco Inc. [TEN], a manufacturing conglomerate based in Greenwich, Conn. Lascar said the effectiveness of conference calls has led his company to use them instead of formal press briefings for earnings releases, which now are done only for two quarters rather than for all four quarters--saving time and money.
The NIRI report shows even wider acceptance of broadcast faxing by investor relations departments. Approximately 90 percent of the companies contacted are using broadcast faxes, coupled with wire release, to communicate their earnings. Lascar says Tenneco broadcast faxes its earnings announcements to its major shareholders immediately after earnings releases go out on the wire.
Apparently because of concerns about the time delays encountered with Internet delivery, as well as the difficulty of obtaining e-mail addresses, use of e-mail to distribute earnings information is not widely practiced. Only about 10 percent of the companies contacted by NIRI now are using e-mail for this purpose. Even in two to three years, only 41 percent of respondents said they would use e-mail.
The story is different with e-mail's electronic cousin, the World Wide Web. Eighty-four percent of responding companies either have a home page now, or will within one year. Of these companies, 81 percent said the home page has, or will include an investor relations section with financial and shareholder information. Among the information being posted are quarterly earnings releases, 10Ks, 10Qs, annual reports and transfer agent information.
Speaking generally of the IR profession, Scott Higgins, director of investor relations at multimedia tool developer Avid Technology Inc. [AVID], said, "We're just starting to scratch the surface of the Internet."
Editor's note: copies of the 37-page NIRI report are available for $35. NIRI can be contacted 8045 Leesburg Pike, Suite 600, Vienna, VA 22182, 703/506-3570. (NIRI, 703/506-3570; Avid, 508/640-3563; Tenneco, 203/863-1186)