Use interim reports and call transcripts to follow a company between annual reports.
The annual report comes out once a year, and a company can change a good deal before the next one. Between reports, companies publish interim results and hold calls with analysts. These are where you check whether the story you read in the annual report is still true, and whether management has done what it said it would.
US companies file a 10-Q with the SEC after each of the first three fiscal quarters. It contains condensed financial statements, notes, management's discussion and updated risk factors. There is no 10-Q for the fourth quarter; the 10-K covers it. Most US companies also issue a results press release on the same day as the 10-Q, with the headline figures and a reconciliation of any adjusted measures.
In 2020, SGX moved most listed companies from quarterly to half-yearly reporting. Companies whose auditors have raised certain concerns must still report quarterly, and some other companies choose to. Results announcements go up on SGXNet and include financial statements, a performance commentary and often a slide presentation. Check a company's announcement history to see which reporting cycle it follows.
Interim reports are usually unaudited. Auditors may review them, but a review is much less thorough than an audit, so treat interim figures as somewhat less reliable than annual ones.
Many US companies give guidance: a range for next quarter's or the full year's revenue or earnings. SGX companies give guidance less often and more loosely, usually as outlook commentary. A change in guidance usually moves the share price more than the reported quarter does, because the price already reflected expectations for the quarter just ended.
An earnings call has two parts. Management presents the results in prepared remarks, then takes analysts' questions. The prepared remarks are polished, and the Q&A is where you learn things. Analysts who follow a company closely ask about what they think management is glossing over, and whether management answers directly or changes the subject is information in itself.
Marcus, the investor in the course's running story, followed the last call of a chip designer. Three analysts in a row asked about inventory, which had grown faster than sales for two quarters. Management said it was building stock ahead of a product launch. Marcus noted that this matched the pattern he had seen when short interest rose, in Lesson 5.6, Short selling, borrow cost and what short interest tells you, and that next quarter's inventory figure would test management's answer.
US companies usually publish a recording or webcast on their investor relations page, and transcripts are widely available from data providers. SGX companies more often hold results briefings for analysts and publish the slides; transcripts are less common. Where a transcript exists, read it instead of listening, since you can search it and compare it with earlier calls.
The most useful thing to do with interim results is to score what management said before. A year ago, Marcus heard Larkspur's chief executive say on the results briefing that the coatings business would return to healthy margins within twelve months. Larkspur is an invented company too. The promise sounded reasonable, and he did not write it down. This year's results showed coatings margins lower than before, and nobody on the call mentioned the promise. With no record, he had no way to hold management to it or to judge how much to believe the next one.
After that he started a promise list. On each results release or call, write down specific promises you can check later, such as a margin target, a cost saving, a factory opening date, a debt reduction or a return to growth, and note who said it and where. When the next results come out, mark each one met, missed or quietly dropped. Marcus's first two Larkspur entries read:
CEO, results briefing: coatings margin to recover within twelve months. Missed. CFO, same briefing: capital spending to stay near 8% of revenue. Met, 8.5%.
Kept over a few years, the list shows how far to trust management's forecasts. Some teams set targets they beat; others set targets they miss and then stop mentioning. A single missed promise does not settle anything, but a pattern of five does. No financial ratio captures this, and the record costs nothing but the habit of writing things down.
Interim figures get restated, guidance gets revised and transcripts get corrected. A note that says "revenue up 9%" soon becomes ambiguous: it could be the quarter, the half or the year, reported or adjusted, from the press release or the 10-Q.
Give every figure you record three tags: the period it covers, the source document and that document's date, plus a page or slide number where there is one. A fully tagged entry, made up for illustration, reads: S$205 million, first half, results announcement on SGXNet, dated 9 August, page 3. It feels fussy, but it means someone else can check your records, and so can you a year later. Lesson 6.8, Build an annual report reading log for one company, builds this habit into a log.
For the activity, start by checking your chosen company's announcement history to confirm its reporting cycle. Then read its latest results announcement (or 10-Q and press release) and, if one exists, the call transcript or briefing slides, paying most attention to the analyst Q&A and any change in guidance. Find two specific promises management made that you can check against the next set of results.
Read your company's latest results announcement and call transcript. Write down two promises management made that you will check next time.
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