A leap forward in quarterly earnings stories

The Associated Press announced in an advisory to customers today that the majority of U.S. corporate earnings stories for our business news report will eventually be produced using automation technology.

Here, Lou Ferrara, the AP managing editor who oversees business news, explains how this leap forward takes advantage of new technologies to free journalists to spend more time on things like beat reporting and source development while increasing, by a factor of more than 10, the volume of earnings reports for customers.

Lou Ferrara, vice president and managing editor

Lou Ferrara, vice president and managing editor

Why is the AP doing this?

Like all media companies, AP is constantly reviewing what content it needs to provide to customers and the best use of its reporting resources. At the same time, we analyze the value of the content we produce in the marketplace.

For many years, we have been spending a lot of time crunching numbers and rewriting information from companies to publish approximately 300 earnings reports each quarter. We discovered that automation technology, from a company called Automated Insights, paired with data from Zacks Investment Research, would allow us to automate short stories – 150 to 300 words — about the earnings of companies in roughly the same time that it took our reporters.

And instead of providing 300 stories manually, we can provide up to 4,400 automatically for companies throughout the United States each quarter.

We believe technological automation will be a part of many businesses, including those in media. As part of its business relationship with Automated Insights, AP participated in the company’s latest round of investment financing with other strategic partners.

Does it mean we are no longer providing editorial coverage of earnings reports?

No. If anything, we are doubling down on the journalism we will do around earnings reports and business coverage.

We are going to use our brains and time in more enterprising ways during earnings season. Rather than spending a great deal of time focusing on the release of earnings and hammering out a quick story recapping each one, we are going to automate that process for all U.S. companies in the 4,400. (We are exploring whether we can automate earnings from companies outside the United States.)

Instead, our journalists will focus on reporting and writing stories about what the numbers mean and what gets said in earnings calls on the day of the release, identifying trends and finding exclusive stories we can publish at the time of the earnings reports.

AP’s staff breaks a lot of business news and obtains numerous exclusives throughout the year from many of the top companies in the world. We know that is what our customers want and we are going to deliver more of it through this process.

Are we eliminating jobs to do this?

No. This is about using technology to free journalists to do more journalism and less data processing, not about eliminating jobs. In fact, most of the staff has been receptive to the effort and involved for the past few months of discussion.

How does it work?

Zacks maintains the data when the earnings reports are issued. Automated Insights has algorithms that ping that data and then in seconds output a story. The structure for the earnings reports stories was crafted by AP with Automated Insights. All conform to AP Style, the standard of journalistic style.

The stories will be labeled as being produced automatically with material from Zacks.

As we begin using automation technology in July, we will check each automatically generated report and then publish to the AP wire. As we work out any problems, we hope to move to a model of more fully automating the reports and spot-checking the feed for quality control.

Will you be automating other parts of the AP report?

Interestingly, we already have been automating a good chunk of AP’s sports agate report for several years. Data comes from STATS, the sports statistics company, and is automated and formatted into our systems for distribution. A majority of our agate is produced this way.

By comparison, though, the earnings reports are produced into stories – not just data feeds. And we are looking at whether there are other things we should be automating in this way. Last football season, we introduced an automated NFL player ranking on the website for pro football that we host for newspapers. That ranking included automated text descriptions of player performances each week, which were produced by Automated Insights. We also are examining the potential for automating results stories for lower-audience sports.

When will the automated earnings reports be available?

We are planning to go live in July, and we will be paying close attention to all of the reports as we adapt to this new process. We will address any concerns or bugs, and then keep moving ahead.

Our hope is that customers will begin to see the benefits almost immediately through more breaking business news and an increased volume of earnings reports. Many customers will receive info for companies in their markets that they never received from AP before.

Financial markets story to feature format suited to Web and mobile

The following advisory was sent today to editors at AP member news organizations:

Starting next month, The Associated Press will take a fresh approach to its coverage of global financial markets.

Instead of two separate stories each day – one about U.S. markets and the other about international markets – AP will produce a single story that reports and analyzes the most important global news and trends.

This July 16, 2013 file photo shows a street sign for Wall Street outside the New York Stock Exchange in New York. U.S. stock futures are steady Wednesday, May 28, 2014, with the market market hovering at record levels. (AP Photo/Mark Lennihan, File)

(AP Photo/Mark Lennihan, File)

The global financial markets story will be updated throughout the day in Asia, Europe and the U.S. and will include coverage of stocks, bonds, oil and other commodities.

The story will move under the slug BC-Financial Markets, beginning on Monday, July 28. It will replace BC-US-Wall Street, BC-World Markets, BC-Oil Prices and BC-Commodities Review. (AP will no longer write separate daily stories on oil and commodities.)

Just like the current Wall Street story, the new Financial Markets story
will feature an easy-to-read format suited to the Web and mobile devices. It will include a market summary, followed by brief sections that highlight key news and trends. (See two examples below.)

This format gives readers lots of information with continuous updates and catchy headlines.

After markets close each day in the U.S., the AP will continue to publish a more traditional, narrative-style story that summarizes and analyzes the most important events in financial markets. A narrative-style story about markets can run at any time, in any global region, when warranted by major news events …

Here’s an example of how the new format for the BC-Financial Markets story might have looked like on June 11 at around 5 a.m. Eastern time, reflecting moves in Asian and European markets:

LONDON (AP) — Global stock markets turned skittish Wednesday after the World Bank lowered its global growth forecast and a militant takeover of a key Iraqi city pushed oil prices higher. The World Bank cut its 2014 growth forecast to 2.8 percent, citing a bitter American winter and the political crisis in Ukraine. The weaker outlook sent Asian markets mostly lower, except for Japan, which closed slightly higher.

KEEPING SCORE: Germany’s DAX dropped 0.6 percent to 9,969 and the CAC 40 in France fell 0.7 percent to 4,563. Britain’s FTSE 100 shed 0.5 percent to 6,839. In the U.S., stock index futures sagged in pre-market trading after a run of record highs. Dow Jones futures fell 0.3 percent to 16,894 and S&P 500 futures were down 0.4 percent to 1,943. Earlier, Asian indexes closed mostly lower.

WEAKER FORECAST: The World Bank’s gloomier outlook dampened investors’ enthusiasm for stocks, which had been on the upswing. The bank cut its forecast for growth this year to 2.8 percent from the 3.2 percent it forecast in January.

OIL SPIKE: Oil prices rose ahead of an OPEC meeting in Europe that is expected to keep production levels steady for the year. Benchmark U.S. oil for July delivery rose 30 cents to $104.65 a barrel in electronic trading in New York, extending Tuesday’s large gain. Energy markets were also affected by al-Qaida-inspired militants overrunning much of the Iraqi city of Mosul on Tuesday. Mosul lies in an area that is a major gateway for Iraqi oil.

THE TAKEAWAY: IG Group analyst Ryan Huang said the broader outlook for the global economy remains strong, especially after the European Central Bank announced additional monetary stimulus. “Last week’s monetary policy decision by the ECB to cut rates should also set the eurozone on course for recovery and help developing countries as a market for their exports,” Hwang said in a market commentary. “That will be a further boost for China.”

ASIA: Hong Kong’s Hang Seng closed down 0.3 percent at 23,257.29 and Australia’s S&P/ASX 200 dropped 0.3 percent to 5,454. Seoul’s Kopsi inched up 0.1 percent to 2,014.67 and China’s Shanghai Composite posted equally anemic gains, rising 0.1 percent to 2,054.95. Japan’s Nikkei 225 rose 0.5 percent to 15,069.48, helped by indications that a downturn from a sales tax hike instituted in April might not be as severe as originally expected.

CURRENCIES: The dollar fell to 102.06 yen from 102.33 late Tuesday. The euro slipped to $1.3534 from $1.3544.

And here’s what a version might have looked like on June 11 at about 1:30 p.m. Eastern time, reflecting trading in U.S. markets:

NEW YORK (AP) — U.S. stocks slipped and government bond prices rose after the World Bank downgraded its forecast for the global economy this year, citing a bitter American winter and the political crisis in Ukraine. Markets also slumped in Europe and Asia, except for Japan, where indexes ended slightly higher.

KEEPING SCORE: The Standard & Poor’s 500 index fell six points, or 0.3 percent, to 1,944 as of 1:20 p.m. Eastern time. The Dow Jones industrial average dropped 99 points, or 0.6 percent, to 16,846. The Nasdaq composite fell four points, or 0.1 percent, to 4,333. Markets also closed lower in Europe and Asia.

GLOBAL GROWTH: The World Bank said late Tuesday that it expects the world economy to grow 2.8 percent this year, below the 3.2 percent expansion it had predicted in January.

TAKING A PAUSE: Despite declines Tuesday and early Wednesday, the S&P 500 has been on a slow and steady rise since April and is now up 5.2 percent for the year. In recent weeks, encouraging economic reports have pushed the index to a string of all-time highs, with its latest record of 1,951.27 occurring Monday.

KEEPING THE FAITH: The rally in stocks should continue this year as the economy strengthens, said James Lui, global market strategist at JPMorgan Funds. In the last month, stock gains have been led by the technology and consumer discretionary sectors, which should benefit more from stronger growth. This move “is going to be what drives the market further along,” Lui said.

BEST BEHIND US: Boeing fell $2.88, or 2.1 percent, to $134.37 after brokerage RBC cut its outlook on the plane maker’s stock. Analysts at the bank say that after three years of record orders and no new planes in the pipeline, the good news for Boeing is “already out there.”

TAX BOOST: H&R Block jumped $1.34 cents, or 4.4 percent, to $32.07 after the tax preparation company reported earnings that beat analysts’ expectations. The company’s fourth-quarter net income surged as more people used its services and its prepaid card.

TOUCH-SCREEN TECH: Synaptics jumped $18.16, or 27 percent, to $84.68 after the maker of touch-screen technology said it would buy smartphone and tablet chipmaker Renesas SP Drivers for $475 million. Because of the deal, Synaptics also raised its fourth-quarter revenue outlook.

BONDS, COMMODITIES AND CURRENCIES: As stocks fell, government bonds rallied. The yield on the 10-year Treasury note eased to 2.64 percent from 2.65 percent late Tuesday. The price of oil was little changed at $104.34 a barrel. The dollar fell to 102.10 yen from 102.33 late Tuesday. The euro slipped to $1.3514 from $1.3544.