earnings call

Does anyone else listen to earnings conference calls? Schlumberger announced fourth quarter and full year 2008 results today. I've listened to most of the calls in the last couple years out of a combination of personal interest, intellectual curiosity, and a chance to listen our CEO during what are usually excellent question and answer segments. The typical call is about an hour long with the first 15 minutes dedicated to earnings announcements and the rest of the call given over to a Q&A period. Our CEO usually fields most of the questions, however some questions get fielded by the CFO or the CEO might address one of the other executives for additional information on a specific topic.

Obviously, I have a degree of insight during the SLB call given my own experiences here and what I've learned about the workings of other segments and the company as a whole. The SLB calls are also incredibly informative during the Q&A sessions and if you know what's what, then there's a great deal to learn, specifically about what our CEO thinks about the overall market direction and how operators (the companies or nations that actually produce oil and/or natural gas) interact and contract with service companies (like SLB). Since I sort of know how some aspects of the company work, it's interesting to listen to how some questions get answered and what information can be shared and what is deemed too 'strategic' to divulge, usually about how CAPEX is allocated and other areas concerning the deployment of resources as well as questions about ongoing contract negotiations.

I am sometimes amused by the subtle awkwardness during the conference calls. On this latest call, an analyst asked, "Have you become incrementally more negative over the last two months?" The answer was a one word "Yes" and then followed by a short, but noticeable pause as if the analyst expected the CEO to elaborate further. It reminded me of the Q3 call which seemed to carry a more stressed tenor than previous calls, perhaps because it was in the midst of the beginning of this credit meltdown and it's larger impact was just stating to ripple through the oil and gas industry. However, now that the overall economy (for everywhere, not just the US) is badly stressed (what a great euphemism), this latest call seemed much more frank and open about how the economy is impacting the sector which is to say the current exploration and production market is severely weakened to the point that it will noticeably impact 2009 fiscal performance and possibly necessitate further head count reductions. Essentially, times are tough right now and very few are immune, especially any company this big.

I have yet to listen to the earnings call for any other company, but it is something I should really do. While I would lack the familiarity I have with SLB, it would still be an interesting undertaking. Some might even say it is a necessary exercise if I were to own such a company's individual stock (outside of a mutual fund or similar vehicle). So does anyone listen to calls for their own employers or previous employers? Yeah, you know who you are who recently worked for two sizable tech firms in the Bay Area. Any insights?

I must wonder if listening to the call for any finance-related company in the last several years would have been useful or if it merely would have distorted my eager and innocent mind from properly understanding how big banks are supposed to be run. Given the financial voodoo that apparently went on in the last few years, how awful of a knowledge base would those calls have been? This just might be the right time to start listening to conference calls for the big financial service firms. But with a twist of cynicism.