It’s not just Lyft — companies make mistakes in earnings press releases at least once a week, analysis finds

When companies prepare to put out quarterly earnings releases, they take a deep look at what their rivals are saying, the questions analysts are asking and the broader attitudes of the markets, according to Nick Mazing, director of research at market intelligence firm AlphaSense.

The process, he said, brings together investor relations teams and consultants, the chief financial officer and, possibly, the CEO. It requires drafting up press releases, regulatory filings and slide decks, pre-recording management’s remarks for earnings calls and fielding analyst questions live during those events. A single earnings release, he said, is “basically the Super Bowl” for corporate investor relations.

But as Lyft Inc.’s results recently showed, mistakes from companies — as with the financial media that covers them — can still get through.

Over the past two years, companies have made at least 150 corrections announcements for corporate earnings press releases, according to an analysis by AlphaSense. Those mistakes have ranged from publishing the wrong dial-in number for an earnings call to errors that make a stock price go haywire.

Mazing, in an email on Friday, said the volume of mistakes had fluctuated from quarter to quarter over the past two years, with no discernible uptrend or downtrend.

“While there is no real trend here, the important takeaway is that it is not uncommon to issue an earnings PR correction,” Mazing said over email. “It happens more than once per week.” 

Data from the firm also found an increase in the number of companies worth more than $1 billion notifying regulators that they would be late in filing their annual reports. That number — as reported earlier by the Financial Times and confirmed by AlphaSense — stood at 16 so far this year, compared with nine a year ago. Mazing said there was no root cause for that increase.

For Lyft
the error came down to a typo in a forecast for an adjusted profit figure known as adjusted Ebitda margin — or earnings before interest, taxes, depreciation and amortization.

Shares of the ride-hailing platform, for one reason or another, shot more than 60% higher after hours, before paring gains. Lyft later corrected the error on its earnings call, earnings release and in a filing.

Since then, Mazing said, other companies have had also had errors in earnings releases. AlphaSense’s analysis, he said, was based on a search of its own database for the phrases “correcting and replacing,” “corrects and replaces,” or the word “correction” with spaces between the letters.

Fitness-center chain Planet Fitness Inc.
for instance, corrected a release to say it expected a full-year same-store sales gain “in the 5% to 6% percentage range,” as opposed to “the high single-digit percentage range” as stated in an earlier version of its earnings release. Electric-truck maker Rivian Inc.,

meanwhile, had to change a release to say that a 147% increase in deliveries was “for the year ended December 31, 2023” as opposed to the fourth quarter. The car-wash chain Mister Car Wash Inc.

had to change its initial full-year same-store sales outlook — to a gain of between 0.5% and 2.5%, from a range of down 0.5% to up 2.5%.

As with Lyft, all three of those companies, in filings, attributed the mistakes to “clerical error.”

Lyft’s error has raised questions about the unrelenting use of jargon in earnings releases and on earnings calls, and the extent to which it benefits executives and wealthier, sophisticated investors at the expense of retail traders. While those errors might frustrate investors, there might be little they can do, at least legally, if companies correct minor mistakes promptly.

“The reality is that people make mistakes, and mistakes are not securities fraud,” Brad Foster, a securities litigation partner at the law firm Haynes Boone, told MarketWatch last month.

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