How to Evaluate Press Releases

Press releases are sent out by a company’s communications department to disseminate company data/information (for example, financial results for a quarter, an upcoming merger, a change in officers) and opinion to people outside the company, from the general public to shareholders and government agencies.

Positive points of press releases include providing current information (ex: quarterly results to update annual report data), representing official company views, and they may fill information gaps.

Negative aspects of press releases to consider: company point of view may be skewed in its favor, selective facts may be presented, and information may not be in context of industry results.

Unless it is found in Lexis/Nexis as a full press release, a press release will probably not be labeled "press release." Look at the examples below to learn to identify a press release in the business magazines and trade journals you will encounter.

Douglass, Elizabeth. "Stac Electronics Does Some More Buying." The San Diego Union-Tribune 11 October 1995: C-3. This is probably based on a press release, but since the company is located in San Diego County, it may contain some extra insight. The author is a business journalist who writes for the U-T.

Fisher,Christy. "Have Hotel Key, Will Cyber-Travel." Advertising Age 8 August 1994: 15-16. This might be a press release about how Hilton Hotels have rooms with computer hookups and internet access or it could be a more general article on how several hotels offer this option. You’d have to find the article to check.

Hawkins, Lori. "AMD Earnings Dip as 486 Sales Drop; Austin Microprocessor Company Hurt by Intel’s Move to Sell Off it 486 Inventory." The Austin American-Statesman 19 December 1995: D1. Probably mostly press release, but you’d need to check because of local paper angle.

Obvious press releases can appear in sources such a PR Newswire and Business Wire as well as in the company’s web site. Be sure to judge the filters your sources use in choosing information to give you. "Novell and Microsoft Settle Largest BBS Piracy Case Ever" from the Microsoft web site is probably positive news for Microsoft.

Titles also provide clues:

• "Intel Corporation and Micron Technology Announce Flash Memory Cross-Licensing Agreement" (on the web site for Micron Technologies);
• "Stac Electronics Reports Earnings for Fourth Fiscal Quarter 1995" (web site);
• "Stac Electronics Changes Name to Stac, Inc.; Change Made to Reflect New Business Strategy" (on PR Newswire);
• "Motorola Posts Surprising 16 Percent Decline in Profit for 4th Quarter; Sales Rise 13 Percent" (in the Wall Street Journal);
• "CellStar Same-Store Sam’s Club Sales" (Dow Jones News Service)
• "Fretter Units File Chapter 11" (Crain’s Detroit Business)
• "Praxair Acquires Laser Metalworking" (Business Wire)

If using Lexis/Nexis, compare stories at a given date from the same release:

• "Gateway to Open Malaysia Plant Next Month" (Reuters, 27 November 1995)
• "Gateway 2000 Announces New Plant in Malaysia: Manufacturing Facility to Serve Growing Asia/Pacific Markets" (Business Wire, 27 November 1995)

copyright 1998 Gretchen N. Vik