Beginner’s Guide to Earnings Season

Fri Jul 31, 2020, 02:36 pm | by Delaney | No comments

Every quarter, publicly traded companies are required to disclose their earnings with the public and do a live conference call with investors. The bulk of publicly traded companies do this during earnings season— the time period where many companies disclose this information. Keep reading to learn:

  • What is Earnings Season?
  • What do Analyst Ratings mean for earnings?
  • Why Use Earnings Per Share?
  • How to Know When a Company is Reporting
  • How to Access Earnings Announcements in Benzinga Pro

What is Earnings Season? 

Earnings season is the time of the year where publicly traded companies report their quarterly earnings. Typically, this starts the month following the end of the quarter. For example, when quarter one ends in March, earnings season begins in April. This gives companies time to put together the report and go through the necessary accounting. 

According to Investopedia, the “unofficial kickoff” to the season is Alcoa’s earnings report, as they are one of the first major companies to release their earnings, and the number of reports per day increase from there. 

Reports include an income statement, balance sheet, and cash flow reports. Earnings season also means a company earnings conference call. The public can listen in and hear a presentation about the quarterly results and any other information the company needs to share.

Earnings season is important for those interested in a company’s fiscal performance, quarterly earnings, and earnings per share. In general, large companies with low earnings will typically drop in price. However, small companies may have low/negative earnings and get a bump in share price if investors believe in the company.

What do Analyst Estimates Mean for Earnings? 

Analysts typically issue earnings expectations for the companies, and if a company misses or beats those estimates, it usually affects stock price. Analysts usually estimate the revenue and earnings per share. 

The average consensus of analyst ratings is what is used for the expected earnings and earnings per share. The difference between the expectations and actual numbers can be a catalyst for big price movement, depending on the actual earnings of the stock. 

For traders, this could be an opportunity to capture a quick news catalyst. Long-term investors may use this season to adjust their portfolio or keep an on short-term price change. 

Why Use Earnings per Share? 

The earnings per share figure is important to see how the report compares to others. Two companies could have $10 million in earnings, but one company may have 5 million shares, and the other may have 10 million shares. 

Earnings per share is calculated by dividing profit but outstanding shares of stock. 

How Do I Know When a Company is Reporting? 

To know when a company is reporting earnings, find an earnings calendar you like to keep track of it.  A few examples include Yahoo! Finance, Nasdaq, and Benzinga’s own earnings calendar.

You can also find earnings announcements through the SEC database. 

Earnings Season Using Benzinga Pro 

One of the many calendars in the Benzinga Pro Calendar tool is the earnings Calendar. This is your one-stop for earnings season announcements.

The Benzinga Pro Earnings Calendar will show you: 

  • Before Market Open/After Market Close
  • Announcement Date
  • If Estimated Announcement Date is Confirmed 
  • Company Name and Ticker Symbol 
  • Quarter 
  • Estimated Earnings Per Share 
  • Estimated Revenue 
  • Confirmed Earnings Per Share 
  • Confirmed Revenue 
  • Surprise

Click here to start your free, two-week trial of Benzinga Pro—no credit card required!

Final Thoughts

Whether you trade on earnings announcements or not, it’s a good idea to keep track of when a company is announcing, and what the results are. The results will likely create some sort of movement, and that could affect your holdings.

Disclaimer: Benzinga is a news organization and does not provide financial advice and does not issue stock recommendations or offers to buy stock or sell any security. Benzinga Pro is for informational purposes and should not be viewed as recommendations. Benzinga Pro will never tell you whether to buy or sell a stock. It will only inform your trading decisions. You can find our full disclaimer located here.