Journalist’s job change reminds me of old T-shirt

 

balance

During my time in high school and college, cheap cotton shirts sporting witty or funny phrases defined my fashion. They were must-haves more than the jeans or running shoes paired with them. I loved seeing people pass and smile, or laugh, or look at me quizzically if they missed the joke. They also were great icebreakers for someone often too shy to just say hi.

A few shirts ensured an opening. The one with “I’m the one your mother warned you about” made girls giggle, which eased me past “Hi” within that group. Another that said, “Detroit: Where the weak are killed and eaten” so tickled a Motor City native at a buffet in Florida that food shot out his nose.

But my favorite shirt, because my understanding friends liked it so much, said in white Courier lettering, “I’m in journalism for the money.”

The shirt is long gone, but a recent question-and-answer article in the trade publication Columbia Journalism Review recalled it. In the article, business news reporter John Carney discussed his rationale for moving from The Wall Street Journal, a publication that steers from a defined political agenda, to Breitbart.com, which drives headlong into one.

Breitbart’s tilt is so pronounced if it were the Leaning Tower of Pisa it would have toppled by now. Founder Andrew Breitbart built the site around his libertarian views then pushed a more populist message in the years before his death. Today, Breitbart.com is better known as an alt-right megaphone that spent the 2016 presidential campaign delivering a high-volume screech for Donald Trump.

Carney said he embraced Breitbart.com because it lacked a business news division and he was asked to help create one, and because the site appears well-positioned poised to cultivate Trump’s economic message.

“Very few people really got the rise of Trump as right as (Breitbart) did and I think they deserve a lot of credit for being ahead of the curve on that,” Carney told CJR. “We’re going to use that as our model. Perhaps a lot of the reason some of us in mainstream media have been behind the curve is because we bought into too many of the orthodoxies.”

Which is what reminded me of the old journalism shirt. By orthodoxies, Carney means balance: the attempt by news media to hold government and institutions accountable and present facts without political tarnish – a historically hard job given that journalists must also exert personal accountability to do it well.

The problem is that accountability is not naturally sexy, even back when I was wearing that shirt. My friends and colleagues in journalism school and later through a 30-year newspaper career were called to accountability, not doomed to it. They enjoyed the endorphin rush from pursuing truth for the sake of public service and civic justice. They laughed at my shirt because low pay seemed to be a canon in the journalist’s professional code. Those who balked at small salaries lacked commitment, college debts be damned.

For example: In my senior year, the National Enquirer supermarket tabloid sent recruitment letters to prospective graduates working at the campus newspaper. The two-paragraph statement hinted at a starting salary of $50,000, more than twice what was typical at the time. Given the Enquirer’s reputation, my friends laughed at that harder than at my shirt. But two in our crew who quietly inquired and were rejected distanced themselves from us without our prejudice. They appreciated the code but preferred not to buy into it. Soon after they distanced themselves from journalism as well.

Today, the media marketplace spans the width and breadth of the Internet and has no admission requirement or ethical constraints. Journalism degrees no longer announce a commitment to the craft but the ability to write complete sentences. Average salaries are lower now because many news and alt-news outlets believe compensation is measured in clicks and likes and retweets and shares – much more valuable to anyone who prefers brand-building to public service. Breitbart.com saw its readership soar after hitching to Trump’s bandwagon and now draws more unique readers than even Huffington Post, the Washington Post, and Fox News.

Another boon to the media marketplace for people like Carney: the rise of relative truth. Once upon a time, truth was buttressed by supporting facts and diametric to falsity. Now, we are encouraged to believe that truth comes in multiple flavors like ice cream, and we are allowed to choose the one that suits our tastes.

Breitbart.com has “a very single-minded dedication to not being respectable, but as I look at it, to just tell the truth as they see it. And that’s what I want to do,” Carney said. “I find that spirit of willingness to be the dissenting truth-tellers very attractive.”

The truth as they see it. We already have a word for that in the dictionary: opinion.

Truth is never easy to obtain because it is like gold; you have to mine for it. Those who fit the unexpurgated definition of a journalist still feel the same call to service I did when I was in the profession and possess an innate duty to hold others accountable for the sake of our republic. Indeed, theirs is a vastly different playing field dotted with obstacles unimagined when I was in the game, but they suit up daily with eagerness and vigor.

When I tell them about the shirt, they laugh, they get the joke. They wish they had one. If I made a new one substituting the word “clicks” for “money,” they would laugh at that, too.

Carney? Probably all I would get from him is a quizzical look – if not his middle finger.

Trump’s tweets hurt his support in the Heartland

trump-tweets

Image courtesy of Vocativ.

My aunt’s glittering Christmas tree remained up and surrounded by presents well past New Year’s. Outdoors, Trump-Pence campaign signs posted around her rolling rural Missouri community did, too – for much the same reason.

“It’s too cold to do anything,” one of my cousins said. “Door froze shut on the car yesterday.”

Across America’s Heartland, one southward bending jet steam after another pulled down bitter cold from Canada since the week after Thanksgiving. Feels-like temperatures had minus signs in front of them, turning county and backroads into strips of ice and freezing my family’s travel plans to my aunt’s house.

Before that, stretching to Election Day, dripping skies turned the rich, dark soil to mud around this mid-Missouri farming landscape, literally and figuratively freezing it in place since Nov. 8.

But when the thaw comes, I wonder if the Trump signs are pulled down before the Christmas decorations.

The hint that they might came during a TV news break between playoff football games. My aunt, whose prayers for clear roads and a big family Christmas were answered, was picking up bits of wrapping paper left after a 90-minute cacophony of gift-giving and food consumption in her broad living room. Recovery victims slouched in every chair and nook between them. About half the sets of eyes aimed at the TV were half open.

Then the news announcer reminded viewers of Donald Trump’s pointed and petty Twitter exchange with Arnold Schwarzenegger two days earlier. A low grunt oozed out on either side of me from a couple of people I knew to be Trump supporters.

“God, I wish he would just shut the hell up,” one of them muttered at the screen.

My ears tingled. The rest of the audience remained quiet. The news announcer was in mid-sentence when some smaller members of our brood returned from playing upstairs. So, later, as the mutterer and I were in the corner of the kitchen nudging second helpings of pecan pie onto fresh paper plates, I leaned in to whisper an inquiry.

“So, eh, not happy with Trump?” I ventured delicately.

This violated protocol on this side of my family, which keeps its ties to one another closer than to politics. In a house brimming with contrasting and conflicting viewpoints on virtually every topic, conversations hew eagerly to health and happiness, weekday labor and weekend relaxation, the severe weather and the cheerful coos from the newest great-grandchild experiencing her first Christmas. Political discussions remain stored with the lawn chairs awaiting the warm-weather days when they can drift harmlessly on sultry breezes.

The mutterer, another of my cousins, applied two dollops of whipped cream to his slice of pie and also whispered.

“Yeah, well, yeah. It’s just … you know …”

He paused.

“I mean, he keeps saying all this stuff that doesn’t really matter and makes him look silly.”

“Hmm.”

“Stuff that makes it look like he’s not paying attention or doesn’t want to.”

“You mean, on Twitter? That Schwarzenegger thing?”

“Yeah. That stuff doesn’t matter to anybody.”

It is safe to say my relatives around here know what does. They work on farms and at schools, in construction and manufacturing. They have watched generations of prosperity devolve into desperation. They see jobs continue to disappear and livelihoods diminish, and they know the reasons are multiple, varied, and complex. When my aunt hosts Christmas, they know it is not just a celebration of togetherness, but also her valiant effort to ward off the same creeping desperation, if only for a few hours.

When my family went to cast their ballots Nov. 8, they did it for the sake of change – the sake of their community – not for a celebrity.

“So many people I know are out there looking for work. Still looking,” my cousin said. “(Trump) says he’s bringing back jobs. Man, I am hoping.”

“But it won’t happen right away,” I said. “It’ll take time. You know that, right?”

“Yeah,” said my cousin, extending the syllable and staring down at the whipped cream. “Yeah, it will. And I’d like to hear him say what he’s got in mind to do it. But … this.” He glanced back at the television, which was showing the kickoff for the second game. “This is what he talks about.”

“You think maybe the news should ignore it?”

My cousin sighed. “Nah, nah, that’s not it. They’re going to say things. Everyone will believe what they believe. I think it’s him being on Twitter all the time complaining about things that don’t matter to anyone.”

He moved to leave. I touched his elbow to stop him. “So, you still going to give him a chance?”

He shrugged. “Got no choice. He’s ours now.”

“But if you thought he might keep tweeting like this, would you have supported him?”

Another shrug. “Man, I don’t know. Maybe. I really didn’t like that Hillary Clinton – didn’t like her one bit. But all this tweeting … man … makes me wonder why I voted for anyone at all …”

An arm attached to one of the grandchildren, then the rest of the grandchild, squeezed between us for the pie. My cousin and I ended the discussion and worked through the growing kitchen crowd back to our places in the living room. We settled back into the joy of the occasion. (Trump used Twitter again two days later to slam another star, Meryl Streep, who criticized him at the Golden Globe Awards.)

Later, as everyone said their farewells and packed to leave, I commiserated.

“My best to your friends,” I told my cousin. “I really do hope for their sake that Trump delivers.”

“Thanks, man,” he said and patted my shoulder. “But I think this is all we’re going to get from him.”

This Christmas, cherish your greatest gift

holding-handsA slim, fake Christmas tree stands close against a set of chairs in front of the nurses’ station at Missouri Baptist Hospital’s Cancer and Infusion Center outside St. Louis. Oversized gold and silver ornaments and tinsel cling to the tree’s nylon branches, which sway as the nurses, treatment counselors, and orderlies hurry to serve their patients.

A few feet away, a string of red and green letters spelling “Merry Christmas” dangles in a low curve from the ceiling. Air blowing from the heating vents causes the letters to dance and twinkle in the fluorescent light.

Beneath the string of letters, I listened to Martha, mother of four and grandmother of nine. She was in a treatment lounge chair near mine. We were not introduced. However, I turned my head when a woman sitting next to her commented on Martha’s wig.

“This one is much better,” the woman said to Martha. “Almost looks lifelike.”

Martha smiled and reached up to touch her new hair. “Yes, it does. I think it’s a real improvement, don’t you?”

Small things matter now, such as how Martha’s bangs frame her forehead and curl over her ears. These are the elements of her life she can control. Everything else depends on how her body responds to the pint bag of clear fluid hanging from a metal rod by her head. As she touched her wig, the fluid trickled down a tube toward a pump sewn into her shoulder.

Martha was worried. Thanksgiving was in two days, and she was expecting 30 house guests – family and friends from across the country. She wanted to feel well enough to see them, enjoy them. The last time she was here for treatment, three days of nausea followed. She vomited so hard a blood vessel burst in her eye.

“I can’t be sick this time,” she told her friend. “Every moment this week has to count, you know?”

The Infusion Center is a broad, open room subdivided into small, curtained cubicles. This is where cancer patients receive chemotherapy treatments. Each cubicle contains a reclining chair, a pump to dispense intravenous fluids, and a small flat-screen TV.

Treatments can last hours depending on the dosages and immediate side-effects. The nurses do what they can to make patients comfortable: warm blankets, cool drinks, conversation. One walks around with a guitar and offers to sing the patients’ favorite songs.

On the day Martha and I were there, all 35 cubicles were occupied.

Three weeks later, a young woman named Karen was in the recliner nearest mine. The curtain was drawn between us; she requested privacy. A nurse pulled up a rolling chair next to Karen, and they began chatting.

In August, Karen received her master’s of Business Administration. She already had two job interviews scheduled in New York when she walked onstage at Washington University to accept her diploma. Karen blamed the summer-long exhaustion that came with her across the stage on too much studying. Her parents insisted she get a checkup to be sure.

The nurse listened as she prepared Karen’s first chemotherapy treatment.

“I wish I could plan. I wish I knew what was next,” Karen said, “I feel I was just getting started. Now, I don’t know.”

The nurse’s voice was calm, reassuring.

“You should go ahead and plan. It sounds like you’ve got a lot going on. And it’s always good to be optimistic. Helps with the recovery more than you know.”

Karen said she was trying to keep an open mind, but it was difficult. “Nobody hires someone with cancer.”

The pair turned quiet as the metallic clicking and snapping sounds of chemo treatment preparation continued. Then:

“Is there someone here waiting for you?” the nurse asked.

“No,” Karen mumbled. “I don’t want anyone seeing me this way.”

On my third visit, I was sitting near the Christmas tree awaiting an open cubicle. Across from me, also waiting, were two women with Kyle, 8, a slight pale boy in flannel pajamas, SpongeBob slippers, a blue knit cap and a big smile. Kyle squirmed in his seat. The women – his mother and aunt – were tickling him. He giggled. He charmed the nurses, the orderly pushing a mop bucket, the woman with the guitar.

“Looking good, Kyle. Like the hat,” said Amy, the social services counselor, whose white smock fluttered against Kyle’s ears as she breezed past.

“My sister made it for me,” he said happily. “She’s 13, you know.”

Kyle’s initial leukemia diagnosis had come before he turned 5, which means his lifetime of memories is framed by the disease. He knows everyone’s names at the Infusion Center, including the volunteers who work without name tags. He sparkled like the Christmas ornaments. They bounced and clanked as his chair nudged the tree.

It occurred to me at that moment: the ornaments were oversized because everything else here is, too – the love and the loss, the plans and dreams, the joy and pain, and the laugh of a little boy awaiting his next dose of hope.

Each of us carries around a gift too great for the space in our hearts. Yet we take that gift for granted because it fits neatly within the container of our lives. This holiday season, pay special attention to those great gifts. For millions like Martha, Karen, and Kyle, they are the most precious any of us ever possess.

The greatest man from the Greatest Generation

Eugene Eisenhauer, 1924-2016

Eugene Eisenhauer, 1924-2016

On paper, Eugene Walter Eisenhauer was listed among the Greatest Generation. His country spent decades deciding whether he belonged on that list, and when recognition finally came he mostly ignored it.

Other things mattered more by then: his six grown children and their offspring, and thoughts of retirement. The southern Illinois economy central to his life was poor and getting poorer, and the lumber yard he owned was whittling down his peace of mind.

But in 1988, the federal government agreed that the risks Eugene and thousands of others took during World War II in service with the U.S. Merchant Marine qualified him for wartime veterans benefits. He submitted the qualifying documents behind a wave of nagging from his family.

I asked my father-in-law to tell me about his wartime life, about how he crisscrossed two oceans aboard creaking cargo ships to help supply the Allied war effort. Usually, he demurred. The few stories he relinquished oozed forth slowly, like tar dripping from a hot metal bucket. Each drip landed hard.

Like the one about a convoy crossing fast and alone across the North Atlantic late in the war. The Navy was too busy fighting elsewhere. So, the convoy’s only protection against enemy submarines was speed. But subs found them – as they often did – and Eugene watched from the center of the convoy as ships on the fringe erupted into brief towers of orange flame, then vanished into the inky black water.

Or the one about Eugene crawling hand over hand the length of the ship, a metal cable tied to his waist, so he could reach his watch station at the bow during a ship-tossing storm.

Or the one about an argument he overheard between his ship’s captain and a petulant Dutch harbor master who demanded that the vessel, loaded with highly volatile fuel oil, ignore safety protocols and weave through a line of floating mines to reach port.

It is difficult for us to understand now, at a time we equate self-promotion with personal and public validation, why anyone would keep stories like these to themselves. That ignorance spans a wide gap in our understanding of the timing and purpose of true patriotism.

In the 1940s, the threat of a dark future pushed in on America. In cities, towns, and farms everywhere, young men felt compelled to push back. They considered enlistment a necessity, not an option. But the Army and Navy were reluctant to take a man too scrawny to wear their smallest uniform size. In the Merchant Marine, however, Eugene’s slight build was a bonus inside the cramped cargo ships that raced to avoid the enemy.

During his service, Eugene passed through the Panama Canal half a dozen times and sometimes saw the coasts of Europe and Asia on the same trip. He rode in convoys and on ships traveling alone, and he watched the wake of torpedoes pass his ship to hit others. Until then, he never knew the world beyond a few farms surrounding his tiny hometown of Vergennes, Illinois.

When he returned, he settled in nearby Du Quoin, shelved his service medals and sharpened the same sense of purpose that had shaped his patriotism. He raised his six children on the hard fruit of driving milk trucks at dawn along winding country roads, and he hammered together homes from scratch as a construction worker. He also patched neighbors’ broken roofs during summer storms, cinched leaky pipes, and restored light to darkened homes – often at a moment’s notice and without pay – out of compassion, not out of obligation.

Eventually, Eugene partnered with other builders to open a lumber yard, then took it over as the partners trickled out. Along with more homes, he built friendships, respect, and a community-wide appreciation as solid as his service to the country.

All of those enviable qualities were reflected in the long line of mourners who streamed through Sacred Heart Catholic Church in Du Quoin to say farewell at his funeral. He was 92, and though he outlived many friends, and his wife by 18 years, the grieving included the sons and daughters and grandsons and granddaughters of those friends. In small, profound ways stretching across decades, their lives were enriched by this quiet hero of the war who returned to provide a much more heroic and lasting measure of service to his community.

To the federal government, Eugene Walter Eisenhauer symbolized the Greatest Generation. But to the people who revered him, that praise was far too small to describe his true influence.

Everybody’s already made up their mind

Illustration by Jeff Crosby for Salon.com

Illustration by Jeff Crosby for Salon.com

The sound of vomiting awakened me. The smell of it assured no return to sleep.

My roommate was coming out of his coma.

“That’s OK, that’s OK,” a woman told the gently groaning man who had just emptied his stomach and, I noticed a moment later, his bowels. “We’ll take care of that. You don’t worry.”

I heard but did not see any of this. A gauzy, cornflower blue curtain on a metal rod trembled from the activity behind it. Between gulps, the man apologized, his words wavering in the air.

“No problem, no problem at all,” said another woman. The pair sounded much younger than the man they were addressing. “Here, just roll over a little this way so we can get – there, that’s it.”

The whisper of changing bedsheets filled the room. The thud of something wet and heavy landed in a plastic bucket, followed by another thud.

My attention span rippled like water in a breeze. The drugs administered to arouse me from surgery were prying me out of a deathly slumber, but a mild grip continued. The analog wall clock said 3 a.m.

As I noticed this, the women emerged from behind the curtain wearing purple smocks, latex gloves, and their frosted hair bound up in small buns. Each clutched a bulging plastic trash bag and a facial expression wrought from a hard night. The air improved when they left.

My roommate coughed and cleared his throat a few minutes, then was silent. When next I heard him, the hands on the wall clock had spun around three times and sunlight dribbled through the window blinds.

I needed to pee – I could not remember the last time that happened – and so began focusing on how to do it. I had come out of surgery without a catheter and without the use of my shoulders. Long, raw, S-shaped scars curved beneath my arms. A tube jutted from the bottom of each scar. Beneath each tube, a plastic bulb collected orange fluid. Concentrating on how to squirm out of bed unaided softened the edge on my urge.

But in fumbling to stand, I brushed the room dividing curtain, causing one side to slide back on the rod. And that is when I met Clarence from Anna, Illinois. His drooping, swollen eyes stared at a muted TV on his side of the room. He had long white and red tubes running the length of his black arms.

“Hey, hi. Sorry about that,” I said as I grabbed at my loose gown with one hand and my rolling intravenous fluid pump with the other. Pain coursed from my shoulders to my ribs. The half-filled bulbs pulled on my scars.

“No, that’s fine,” he replied and waved to me with thick fingers. “Hope I’m not disturbing you. I guess I got a little noisy last night.”

“Nah. I wasn’t really asleep anyway. They kept waking me every hour to ask a question or poke me with something. How are you doing?”

“Better, I think. They tell me I was out awhile, so I’m not sure,” he said, groggily.

“You mind if I asked what happened?”

“Car crash. I was making a delivery and a woman plowed into my side at a stoplight.”

“You remember that?”

“I remember that much, then I woke up here.”

“So, you feeling better?”

“Yeah. I think one of these tubes is morphine.”

As the last syllable dribbled from his mouth, two other women slid past me, nodded acknowledgment, then positioned themselves on either side of Clarence’s bed. He greeted one as Mom.

“Ohh, baby, how’re you feeling?” She knitted the words together in a long, soft musical note.

“Mmm. ‘K,” he mumbled.

At that, I regathered my gown and rolling IV stand to address the business that forced me upright. When I finished and returned to bed in a way as innovative and as painful as I had left it, the conversation behind the re-extended curtain had changed from a lovely tune to legal matters.

“Police say she’s already got a lawyer …” the woman called Mom said.

“… and he’s already talked to them,” the other woman added. Clarence called her a word like “Sulee.”

“She was the one who didn’t stop,” he told her. “I was stopped and moved out a little to see past the car and then she was slamming into the side of me.”

“I know, honey,” Mom said. “And they know it. But she’s got this lawyer now.”

Piece by piece, the puzzle came together before me. Clarence was working his second job, floral delivery, and had pulled up to a flashing stoplight two blocks from his destination. Cars parked close to the intersection interfered with his view, so he stopped then inched and stopped then inched forward to see better.

He remembered flashing lights, a siren, and someone shouting questions at him. That was four days ago.

“Mmm, yes,” Mom hummed.

“But now you gotta get a lawyer, too,” Sulee said. “You gotta talk to somebody at the college. Got a lot of friends there, right? You’ve worked there a long time. Somebody there knows someone who can help, right?”

“Dunno,” Clarence said. “Maybe.”

“Oh, we gotta try,” Sulee said.

“Dunno,” Clarence repeated. “I mean, look at me, look at that town. Everybody’s already made up their mind.”

Mizzou researchers figure out how to rescue the newspaper industry

Murali-Mantrala

Professor Murali Mantrala showed how one newspaper could raise profits through data analysis. (Photo courtesy of the University of Missouri News Bureau)

If you’re wondering whether the newspaper industry can avoid colliding with irrelevance, there may be a way to change course, according to two University of Missouri researchers.

Murali Mantrala, the Sam M. Walton Distinguished Professor of Marketing and chair of the Department of Marketing at MU, and Vamsi Kanuri, a former doctoral student at MU’s Trulaske College of Business, surveyed more than 1,000 readers of a West Coast daily paper to determine not what news they read, but how they got the paper in the first place. The researchers presented the survey participants with a range of purchase options much wider than what the newspaper already offered.

These options ranged from print-only subscriptions to combinations of print, online and mobile subscriptions. The options also varied in price based on the mix of channels, the frequency of distribution, and whether or not they were advertisement-free.

Mantrala and Kanuri combined that information with data on advertiser spending across the variety of channels to create an algorithm that determines what precise menu of subscription options a newspaper should offer to maximize total revenues from subscriptions and advertising.

Given the customizable options for readers and advertisers, the potential benefit of a subscription menu to the West Coast newspaper equaled a 17 percent increase in the publication’s profits.

“Newspapers are in a quandary; they need to find ways to increase revenues without raising prices or creating barriers that will cause them to lose readers,” Kanuri said in an MU news release. “In developing this algorithm, it was important to determine readers’ preferences for how they wanted to receive their news, as well as to determine readers’ willingness to pay for different types of subscription plans. Once we gathered that data, we were able to streamline a process for making decisions about which subscription and advertising plans to offer in order to maximize profits without losing readers.”

And readers will buy news as long as they know the content they receive is unique, convenient, and relevant to their needs. For proof, look at the way members of the Millennial Generation – ages 18 to 34 – consume content. As a group, almost 90 percent of them purchase music, movies, television, and video games. Other research has determined that people willing to pay for entertainment are also willing to pay for news.

Mantrala and Kanuri said their model works for any newspaper or subscription service, including Hulu, Pandora, or Spotify. Publishers and broadcasters must first conduct audience and advertiser surveys, then organize the collected data by audience segment to determine the optimal subscription menu algorithm.

“Any subscription-based service can use this model if they do the requisite research to determine subscriber interest and willingness to pay for various tiers of service,” Mantrala said. “Using this model, as opposed to years of costly trial and error, can help newspapers and other online businesses greatly improve their profits.”

The study by Mantrala and Kanuri is titled, “Optimizing a Menu of Multi-format Subscription Plans for Ad-Supported Media Platforms,” and is scheduled for publication in the Journal of Marketing.

Kanuri is now an assistant professor at the University of Miami. Esther Thorson, a former professor at the MU School of Journalism now at Michigan State University, also coauthored the study.

6 indicators worth watching in quarterly earnings reports

Earnings Reports Icon

Four times a year, a downpour of quarterly earnings reports drops from the executive boards and financial offices of public companies around the country.

So, grab an umbrella, because the latest storm has started.

Earnings reports announce the revenue, income, and profit or losses of publicly held companies. The companies are obligated to issue them quarterly to current and potential investors and as a 10-Q filing with the Securities and Exchange Commission, the federal agency responsible for enforcing federal securities laws. Second-quarter summaries for the three-month period ending June 30 are going out from tens of thousands of companies right now.

Most of those will contain good news as the Dow, Nasdaq, and S&P have reported consistent gains over the past month, fears of a big Brexit backlash are subsiding, and prospects for the next business quarter are guardedly optimistic – November’s general election outcome notwithstanding.

But finding the important information in a quarterly report amid line after line of corporate vernacular can be dizzying. Having tackled these reports from two sides – first as a newspaper journalist, then at the corporate level – I can tell you that some of the mystery can be difficult for even experienced eyes to unravel. In some instances, only the reports’ authors have the clearest sense of what’s written. That’s because these people must put polish on what could be a dull or dreary three months, while still meeting an obligation to set the record straight.

You can strain your patience and eyesight pouring through these documents. So, skip past the disorienting argot to focus on these key performance indicators:

Cash flow – As in “free cash flow,” or the cash generated from operations minus capital expenditures and dividend payments. This is distinct from EBITDA – earnings before interest, taxes, depreciation, and amortization – which often appears in the bottom third of the report. From a company’s standpoint, EBITDA is fascinating reading, but the real news lies in the cash flow. If it’s positive, that’s a good sign the company can cover its debts and operating expenses.

Earnings per share, net income, and revenue – Combined, these reflect the overall financial health of a company. The EPS reflects how much of a company’s profit is allocated to each outstanding share of stock, net income reflects total earnings, and revenue refers to total earnings from normal business activities. Of course, positive numbers are preferred, but it’s telling whether these numbers fluctuate widely between quarters. The gap between these numbers attests to variations in the …

Margins – These show how much out of every dollar a company keeps. In formula form, two of the most important ones look like this:

  • Gross profit margin = (Sales – Cost of goods sold) / Sales
  • Operating profit margin = Earnings before interest and taxes (EBIT) / Sales

Size matters for both. If the gross margin is high, a company has extra cash to spend on product development and building the business. Rapid decreases from one quarter to the next, caused by such things as higher labor or material costs, may indicate trouble, which the company can mitigate by raising its prices. As for operating profits, a decrease here suggests the company is struggling to control costs.

Earnings per share vs. expectations – Earnings reports reveal not just how a company performed the previous business quarter. Corporate leadership also devotes space to prospects for the next quarter and punctuates them with a quote or comment usually from the chief executive officer or top financial officer. These prospects shape market and media expectations. If the expectations fall short, the company needs to explain why. A deal closing late or a missed order delivery rarely warrant concern. But revenues that buckle under the weight of changing trends, technology, lawsuits, market turmoil, or new technology can prompt investors to scamper away.