The framing and reframing of corporate financial results

Abstract

News agencies are important stakeholders for large organizations, since the news they distribute will be adopted by other news outlets, which influence public opinion and hence corporate reputation. This paper seeks to advance our understanding of how corporate earnings press releases are transformed into financial news by investigating whether the frames introduced by companies are adopted or reframed by news agencies. A content analysis of framing techniques in corporate earnings releases and their corresponding news-agency releases was performed, focusing on the financial figures and benchmarks presented, performance attributions, and the tonality of the texts. Our findings suggest that news agencies reframe earnings releases at the textual-pragmatic level by reducing their length, using fewer financial figures, and changing the position of these figures in the texts; they increase transparency by avoiding adjusted financial figures, qualifying figures, and adding analyst assessments; and they change the tonality by down-toning positive statements and highlighting negative aspects.

The Narrative Strategies of Winners and Losers: Analyzing Annual Reports of Publicly Traded Corporations

“…Penrose (2008) notes that annual reports are often consulted when investors consider purchasing or selling the stock. Rosenkranz and Pollach (2016) note that journalists also rely on annual reports, but news media also “select and interpret corporate information when transforming corporate press releases into news reports” (p. 104).…”

Tone variation in financial news: A comparison of companies, journalists and financial analysts

“…Overall, qualitative research on the embeddedness of financial news has shown how the producers of financial news -companies, journalists and analysts -influence each other while depending on each other. Studies on financial news as the outcome of this embeddedness are few and far between, but have shown how journalists neutralize the promotional language of corporate press releases (Maat, 2007;Rosenkranz and Pollach, 2016). Furthermore, research in accounting has studied news produced by different actors, but has not compared them (Kothari et al, 2009) or even distinguished between them (e.g.…”

“…News agencies face the same challenges, while being even more pressured to increase the speed of their reporting (Manning, 2012). Although this entails that journalists might have to rely on press releases for most of their stories (Goyanes and Rodríguez-Castro, 2019;Usher, 2017), they have been found to reframe promotional language from press releases by means of omissions, additions and changed valence (Maat, 2007;Rosenkranz and Pollach, 2016). However, there is little evidence about the tone of financial news produced by journalists.…”

“…Based on insights about journalistic practices (cf. Maat, 2007;Rosenkranz and Pollach, 2016), we expect that journalists strive for the ideal of balanced reporting by putting things in perspective in order to provide value to their readers. We hypothesize that there is an overall balance between positive and negative tone in journalistic financial news as follows:…”

“…Methodologically, previous studies of tone in financial news are either based on small, manually coded samples (e.g. Guillamón-Saorín and Martínez-López, 2013;Rosenkranz and Pollach, 2016) or several (hundred) thousands of documents, where tone is measured with automated sentiment analysis tools without human validation (e.g. Henry and Leone, 2016;Li, 2010;Loughran and McDonald, 2011).…”