Earnings Transcripts 101 -- Why you should read the Q&A section

An earnings call consists of two parts.  The first part is the prepared remarks by management, generally consisting of a discussion of how the company performed over the past quarter or the past year.  The second part is the Q&A, where participants on the call--typically analysts--can ask questions of management.   The answers given by management to these questions can sometimes disclose significant information that is not mentioned in the prepared remarks.

One recent example is the earnings call by Ralph Lauren.  In the prepared remarks, management discussed the company's performance in Europe:

"Our European revenue was up 26%, an acceleration from the low-teens compounded growth rate we achieved over the prior 5 years. This is considerable progress for a period characterized by substantial macroeconomic challenges. And despite near-term caution, it's also a validation of growth opportunities we continue to see in Europe over the long term."

http://seekingalpha.com/article/608911-ralph-lauren-management-discusses-q4-2012-results-earnings-call-transcript

 Given the economic challenges in Europe in the past year, a 26 percent growth in revenue was quite impressive. One not familiar with the company or the luxury goods market would assume that the European customer still had strong demand for Ralph Lauren products, despite the serious economic problems in the region.

However, during the Q&A, it became clear that at least some of the increase in sales was due to purchases by tourists from the Middle East and Russia, not from European customers:

"We had double-digit growth in France, Germany, Spain, the U.K., Scandinavia and others. I think what you've heard from us today and what you've heard from other people is that the ongoing overhang of economic uncertainties in Europe, which have been now prominent in the press, pretty hot and heavy since the middle of last fall straight through the spring are weighing on the customer's mind. And I think that's true of the local customers by country and to some degree, that's been masked by the tourist business in many of the key capitals."

"While we do get a high degree of tourism, our major tourists are coming from the Middle East or Russia where we have strong presences, and then they find us in other European cities." 

"So our results to date have been primarily based on the local markets and/or tourism from other countries."

http://seekingalpha.com/article/608911-ralph-lauren-management-discusses-q4-2012-results-earnings-call-transcript?part=qanda

The analysts who participated in the conference call were likely aware that a fair amount of Ralph Lauren's international business came from tourism, but that point might not be obvious to an individual investor who is not intimately familiar with the company.  It's always a good idea to read the Q&A to make sure you don't misinterpret the numerical results or the prepared remarks given by management.