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We can always expect companies to put their best foot forward in their press releases but, as investors, it's our job to see through the hype.

One common tactic that companies use to try to excite investors is the trumpeting of "record sales" or "record earnings."

Today for instance, pornography purveyor New Frontier Media (NASDAQ: NOOF) issued a press release reporting the company's third quarter earnings, blaring the headline "New Frontier Media Reports Strongest Revenue Quarter in Company History."

But here's the thing: investors generally look for year over year growth from the companies they own -- a growing company should be reporting "record" revenue with some frequency. It's the equivalent of a fifth grader bragging to his parents that his math class is "the hardest math class I've taken in my entire life." As it should be!

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Seeing through the hype in 'record earnings' and 'record sales' originally appeared on BloggingStocks on Tue, 05 Feb 2008 16:15:00 EST. Please see our terms for use of feeds.

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