AFTER making a big deal last quarter about no longer relying on paid PR wires to distribute its earnings releases, Sun Microsystems, Inc. (NASDAQ: JAVA) has gone back to the traditional approach this quarter.I cannot find an explanation for why the company has decided to once again issue its earnings release first via a PR wire service.
And I cannot fathom why, after urging investors to sign up to get releases via the company’s RSS feeds, the RSS version of the release doesn’t include any financial statements whereas the PR wire service version does.
Stranger still is that Sun switched wire services this quarter. Last quarter, they used PR Newswire. This quarter they’re using Business Wire, which is ironic given the stinging criticism that Business Wire CEO Cathy Baron Tamraz launched at Sun last quarter. She suggested they make bad servers!
All of this just creates the impression that Sun can’t make a decision and stick to it. Everything is haphazard. The left hand doesn’t know what the right hand is doing, and all of that jazz. It’s puzzling behavior for a company that is trying to boost its credibility.
No legal barriers, so what gives?
There doesn’t seem to be any legal reason for Sun to go back to traditional practice. According to this IR Magazine article, the company got no negative feedback on last quarter’s process. Indeed, the National Investor Relations Institute (NIRI) is planning to integrate Sun’s web-first approach into its standards of practice.
Of course, it may simply be that Sun doesn’t explain itself very well. After last quarter’s results, I emailed people at Sun to point out some problems with how they were handling their earnings release distribution. It could just be that they’re trying to fix those issues and weren’t done in time for this quarter’s results.
But anyone who knows anything about credibility should know that consistency is important. And when you’re going to be inconsistent, better to explain yourself ahead of time. Failing to do so can really screw things up for people.
For example, I noticed that Bloomberg made the mistake of writing their story before Sun issued its earnings release, a common practice in the news biz. Their article includes the following incorrect paragraph:
It was the second quarter the company sent its earnings report through an Internet feed, as well as distributing it as a U.S. Securities and Exchange filing and PR Newswire statement. Schwartz, who uses his blog to announce company news, has spoken with the SEC about making investor news available on the Internet. Sun has said all investors should have access to the same information that’s available on subscription wire services.
What’s wrong with the above paragraph? Firstly, Sun didn’t do anything different this quarter from what almost every other company does. The difference was last quarter, Q4, when they put the information on the Web 10 minutes ahead of sending out a press release. This quarter they sent the press release first. Secondly, they didn’t use PR Newswire, they used Business Wire this time. Third, Schwartz hasn’t spoken to the SEC about “making investor news available on the Internet.” He’s asked about putting the information on the Web only, rather than paying to have it distributed via PR wire services as well.
Update: Received the following response from Dana Lengkeek in Sun’s corporate communications department:
I am with Sun’s PR team and read your posting about the distribution of our earnings announcement. I wanted to clarify and provide some background. Sun has always been a proponent of openness and transparency and has asked the SEC to enhance the Reg FD requirements to leverage the Internet and provide greater access to critical company information. Leveraging the Internet to deliver company news complements and strengthens existing requirements and ensures access beyond proprietary outlets. In addition to traditional press release distribution and SEC filings, over the last two quarters, Sun has utilized its company website to provide access to its quarterly earnings results. The company has also used RSS feeds to enable subscribers to receive the information directly. Sun will continue to build upon traditional distribution methods and leverage technology and the network to deliver company information to all interested parties.
The response doesn’t actually answer the question of why they changed back to the old approach after making such a big deal of their web-first approach last quarter. And to say that Sun has “over the last two quarters” been putting its earnings releases on its website is not accurate. It’s been doing so since at least 1996, according to archive.org. As for distributing its earnings releases via RSS, Sun has been doing so for the past four quarters, not two. It’s right there in their feed.
I’m not sure what’s going on, but it doesn’t look like people at Sun do either.