All you need to know about
Earnings Announcements
A company’s preliminary results of operations are called earnings announcements. They include the most recent quarterly date announced as well as revenue, earnings, and earnings-per-share information for that quarter. In the United States, the Securities and Exchange Commission requires companies to state their earnings quarterly according to their fiscal calendar. By contrast, most European companies release earnings twice a year.
Although many people will read earnings announcements to determine how much money a company may have earned or lost, the is a wealth of additional information that can be gathered from these releases. Almost all public companies in the U.S. are followed closely by financial analysts. These are individuals who specialize in certain sectors of the economy such as retail, steel, automotive, software, silicon chips, etc. These analysts track earnings, trends, mergers and acquisitions, and just about every metric one could think of on their selected companies. Part of their job is to predict quarterly earnings which is usually expressed in dollars per share. (This is total earnings or loss divided by total outstanding shares) When a company reports its quarterly earnings, they are compared to what that analysts had predicted. If a company meets the analysts predictions, their stock usually remains stable. However, either significantly exceeding or "missing" (earnings less than predicted) the expected result could cause wide fluctuation in a company’s stock price. Therefore, the business savvy reader of earnings releases is not just concerned with the amount of earnings, but also how it measured up to analyst’s expectations.
Click here to check on upgrades and downgrades of Yahoo.com's analyst recommendations.
The following link is an example of analysts tracking estimates of Nortel Networks.
Click here for an example of an earnings release on Hughes Supply, Inc.:
Many earnings statements
also contain text in addition to just numbers. In the text one finds information
on sales for the quarter versus the same quarter of the previous year. The
Chairman's statement is also included which usually pertains to an explanation
of the quarterly results. This statement takes into consideration any unusual
business conditions that may exist during the fiscal period. For example,
the company may be operating during a time of increased new competition that
has caused a lowering of prices and a resulting lower net profit. At the
conclusion of the text there is normally a disclaimer that states there are
"forward looking" statements referred to in the release that may or may not
be accurate depending on typical fluctuating business conditions.
An example of an SEC 10Q reportfor Barnes & Noble: http://biz.yahoo.com/e/l/b/bks.html
More Resources and Links:
http://www.earnings.com/com/Home.jsp
Features detailed corporate earnings data, and a suite of investments tools. Also acts as an ASP, offering corporate services, including scalable and multimedia broadcast solutions for financial verticals.
http://www.theonlineinvestor.com/earnings_calendar.shtml
Provides expected earnings releases for the current week.
http://biz.yahoo.com/research/earncal/today.html
US Earnings calendar posted every day. Also a search for any company’s earnings announcement date. This site has a convenient feature that allows you to click on a calendar icon and add the live earnings announcement to your daily calendar and planner.
http://cbs.marketwatch.com/news/newsroom.htx?source=htx/http2_m
These two sites are excellent sources of information for individual investors. They contain facts and figures on any public company as well as insightful articles pertaining to all areas of investing.
An excellent informational site that includes all the SEC filings of the recent past and near future.
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Click here to go to FASB: http://www.rutgers.edu/Accounting/raw/fasb/
Click here to visit the SEC: http://www.sec.gov/