By IR Web Report Staff
DAIWA Securities Analyst James Enck has publicly criticized German telecommunications giant Deutsche Telekom on his blog for issuing a late-night profit warning that surprised analysts for its severity and caused a sharp sell-off in the firm’s stock.
“I arrived at work this morning at 6:45 to find that Deutsche Telekom sent out a release at 11:49 PM last night, basically as a pre-release of results and profits warning. Foul!,” Enk wrote in a blog post entitled It’s how you tell ‘em.
The London-based analyst, one of the few of his ilk who blog, said the severity of the company’s miss also underscores “how slowly large, complex companies can respond sometimes. In Q1 we’re comfortable with our guidance, but come Q2, we need to take a EUR1bn haircut. Woops!”
The severity of the company’s miss took other analysts by surprise.
“While market consensus as well as our estimates were already below company guidance for FY 2007, the magnitude of the profit warning is more than surprising,’ AFX reported WestLB analyst Stefan Borscheid as saying in a research note.
Deutsche Telekom’s shares closed down 7.5% and were the worst performer in Germany’s DAX index of big companies.
The lesson here from an IR perspective is to avoid releasing important information at times when most analysts are unlikely to be expecting it. Close to midnight looks suspicious and probably, in this case, made a bad situation worse.
Of course, with listings in Germany and the US, it can be difficult for companies to pick the “right time” to issue news so that it doesn’t disadvantage their investors somewhere in the world.
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