This article investigates
whether investors are influenced by how an earnings press release is written.  FYI: Earnings press releases are
voluntary but still serve to inform investors on the current state of their
company.

The study consisted of
gathering information on telecommunications and computer industry earnings
press releases between 1998 and 2002 and analyzing how the press release
immediately affected the companies share price.  This was done via regression analysis with several control
variables (i.e., company size, reporting losses or profits, and whether a
firm’s earnings exceeded earnings expectations).  The findings were quite interesting and also very applicable.

First, a more positive tone
of voice in the earnings announcements positively affects market reaction but
only up to a certain point. So, keep the report upbeat so that the investors
don’t freak out if the news is bad.  Additionally, a longer press release can actually diminish
the positive market impact when a company announces unexpected earnings, so
keep it short and to the point!