BUSINESS GUIDELINES AND STYLE
Covering business or economic news often intimidates reporters who seldom do it. It should not. Writing about business is not much different from covering a plane crash or a hockey game — you have to find out what happened, then explain it clearly.
This section of the Stylebook is intended to help you do that.
It includes an explanation of how to write one of the most common business stories, the quarterly earnings report issued by all publicly held corporations. And there are alphabetical definitions of business and economic terms and jargon.
A word of caution.
As with any specialty, technical terms and economic argot permeate the business world. Avoid jargon. Define technical terms. Do not assume your reader knows their meaning. Stories about corporations, business executives and economic trends increasingly are spreading beyond the business pages. We must cover these stories so they can be understood by the general public.
Covering Corporate Earnings Reports
Federal law requires all corporations whose stock is publicly traded to report revenues and profits or losses each three months. This is what business is all about — whether a corporation made money or lost it, and why.
Each of these stories should include certain basic information.
The lead should tell the reader what the company does if it is not a household word and should give the increase or decline of profits, either in percentage or absolute terms, along with the reason.
Comparisons of profits or losses and revenues should be made with the same period a year earlier. For example, the third quarter of this year compared to the third quarter of last year. This reduces seasonable variations that affect many businesses.
If the report is for the final quarter of the company’s fiscal year, include the annual profit and revenue figures. Include the earnings-per-share figure, which simply is the profit divided by the number of shares of stock outstanding.
Include comments on the corporation’s performance from the chief executive or outside analysts, and any background that puts the performance in perspective.
Here is an example of a concise and understandable story on Polaroid Corp.’s performance during the final quarter of 1981.
Note the third paragraph, which fits into a sentence the profits, earnings per share and revenues for the quarter, along with the numbers for the comparable quarter a year earlier.
Earnings stories are routine. But with thought, they can pack a lot of information about a company into a small package.
Polaroid Earnings Plunge
CAMBRIDGE, Mass. (AP)—Polaroid Corp. said Thursday earnings plunged 95 percent in the final three months of 1981, in part because of the $30.4 million it set aside to cover the cost of reducing its work force by 11 percent.
Polaroid said other factors contributing to the decline were a slump in worldwide sales of photo products and the cost of introducing its new Polaroid Sun Cameras and phasing out older products.
For the fourth quarter, earnings were $1.7 million, or 6 cents a share, on revenue of $445.3 million, compared with earnings of $32.3 million, or 98 cents a share, on revenue of $460.6 million in the same 1980 period.
Profits for all of 1981 fell 64 percent to $31.12 million, or 95 cents a share, from $85.4 million, or $2.60 a share, in 1980. Sales of the instant camera giant were also down, slipping from $1.45 billion in 1980 to $1.42 billion in 1981.
Polaroid announced a plan several months ago to trim back its staff by offering early retirement incentives. The company says it has cut back world wide employment by 2,000 workers or 11 percent of its work force.
Polaroid President William J. McCune Jr. said international sales declined 9 percent last year, partially due to world wide economic decline and the weakening of foreign currencies against the dollar.
He said U.S. sales were up a modest 3 percent, including an increase in the company’s share of the instant camera market.
Polaroid’s technical and industrial photographic business continued to increase in dollar volume, he said.