MICROSOFT corporation (NASDAQ: MSFT) has become the latest high-profile company to end the decades-old practice of using a paid PR wire service to distribute its quarterly earnings announcements – a move that acknowledges the real-time capabilities of the web.
And it may help to pave the way for many other companies to follow suit. Microsoft has long been regarded as a disclosure leader, including being a pioneer in the use of eXtensible Business Reporting Language (XBRL) and previously filing full 10-Qs simultaneously to its earnings releases.
Most companies have traditionally used PR wires to distribute their quarterly financial disclosures, but recent rule changes by the New York Stock Exchange (NYSE) and NASDAQ have placed greater emphasis on companies’ 8-K and 6-K filings as well as disclosures distributed via corporate websites and associated push technologies.
The US stock exchanges altered their rules following SEC guidance in 2008 recognizing that disclosures on company websites can meet the broad, non-exclusionary distribution requirements of Regulation FD if they meet certain standards of prior notice, prominence, usability, timeliness and accuracy.
IR website is “authoritative portal”
In an announcement yesterday, Microsoft said it will transition to using its website for earnings announcements by issuing a short advisory today via a paid PR wire that contains a link to the company’s investor relations website where investors can obtain the complete information. This advisory approach is used by most other companies that have discontinued the practice of distributing full-text earnings releases via a PR wire service.
Microsoft recently upgraded its investor relations website and yesterday said its “goal is to maintain the Investor Relations Web site as the authoritative portal through which visitors can easily find information.”
The new site features several RSS feeds and an email alert facility, as well as links to the company’s Twitter account and Facebook page, although neither appears to be used for investor announcements.
Blow to PR wires
The move by the Redmond, Wash.-based company is another blow to the PR wire industry, which derives a large proportion of its revenues from financial disclosure releases. Business Wire has sharply criticized companies for adopting web disclosure, even though its parent Berkshire Hathaway (NYSE:BRK.A, BRK.B) does not distribute a full-text earnings release via a paid PR wire. Microsoft is a PR Newswire client.
In its announcement yesterday, Microsoft also appears to have followed the SEC’s 2008 guidance that companies should inform the market of their website disclosure practices and explain what information is provided on their sites.
Since 2008 when the SEC issued its landmark guidance, only a handful of US companies have made any attempt to take advantage of it. This is partly because NYSE rules still required press releases for earnings releases up until earlier this year. PR wire companies have also actively discouraged companies from changing their practices, including Business Wire refusing to distribute advisory releases.
Foreign companies with US listings, however, have been much more inclined to avoid using PR wire services.
We have posted the company’s complete release below:
Microsoft Outlines New Process for Publishing its Earnings Announcements
Company to now post quarterly results to its Investor Relations Web site
REDMOND, Wash. — Oct. 27, 2010 — Microsoft today announced that starting with its first-quarter fiscal year 2011 results on October 28, it will post its quarterly earnings on its investor relations Web site. The company will no longer distribute its quarterly financial results via newswire, although in the future it may choose to issue other financial-related news via newswire in addition to the Web site.
To assist investors, analysts and media with this transition, the company will issue a media advisory shortly after the close of the market on October 28, via newswire which will contain a pointer to http://www.microsoft.com/investor where the full financial results will be posted. In future quarters, Microsoft will issue only the media advisory on the day of its earnings announcements.
Following the release of financial results, the company will host a conference call at 2:30 p.m. Pacific Time. A live webcast of the call can be accessed on Microsoft’s investor relations Web site at http://www.microsoft.com/investor.
- Microsoft makes available at its Investor Relations Web site a variety of information for investors, analysts and media. The company’s goal is to maintain the Investor Relations Web site as the authoritative portal through which visitors can easily find information, including:
- the annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports, as soon as reasonably practicable after that material is electronically filed or furnished to the Securities and Exchange Commission (“SEC”);
- information on business strategies, financial results, and key performance indicators;
- announcements of investor conferences, speeches, and events at which company executives talk about our product, service, and competitive strategies (including archives of past events);
- results of quarterly earnings, product and service announcements, legal developments, and international news;
- corporate governance information including our articles, bylaws, governance guidelines, committee charters, codes of conduct and ethics, global corporate citizenship initiatives, and other governance-related policies;
- other news and announcements that we may post from time to time that investors might find useful or interesting; and
- opportunities to sign up for email alerts and RSS feeds to have information, including quarterly earnings announcements, pushed in real time.
Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.
For more information, financial analysts and investors only:
Bill Koefoed, general manager, Investor Relations, (425) 706-3703
Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://www.microsoft.com/news. Web links, telephone numbers and titles were correct at time of publication, but may since have changed. Shareholder and financial information is available at http://www.microsoft.com/investor.
Learn more about web disclosure in IR Web Report’s guidelines.