Earnings Season

Earnings reports are quarterly financial statements issued by publicly traded companies. An earnings report discloses the profits (or losses) earned by a company in each quarter, along with revenues, other performance metrics and importantly the expected outlook for the company for future quarters and years ahead.

Publicly traded companies are required to provide their shareholders and the broader public with a complete picture of how the business is doing each quarter. Hence, their earnings reports show the company’s profitability and overall financial stability. Understanding earnings reports is imperative for good fundamental investing.

Most companies follow the traditional calendar year for reporting. That drives the following four earnings seasons, with reporting normally starting about 2 weeks after the end of each quarter.

• First quarter (Q1) ends March 31.
• Second quarter (Q2) ends June 30.
• Third quarter (Q3) ends September 30.
• Fourth quarter (Q4) ends December 31.

Company earnings are a key driver of stock price. It is not unusual for the price of a stock to rise or decline significantly both before and immediately after an earnings report.

Market expectations, as measured most commonly, by analysts’ earnings-per-share and revenue estimates, set the tone for how the company is likely to perform. Stock prices tend to rise when earnings results exceed market expectations while disappointing earnings results tend to lower share prices.

Dividends are regular profit-sharing payments made between a company and its shareholders. At HFM, you can receive dividends directly into your account when trading CFD stocks.

No. Companies may choose to release their reports earlier or later than the expected date, or at a different time. But most do release their data at the expected time and date.

Most companies release their earnings before the market opens (BMO), or after market close (AMC). However, some companies choose to release their earnings report during the trading day.

Although there is no set sequence, the earnings season typically starts with the big banks, and ends with the retailers. The blue chip technology companies also tend to report towards the end of the season.