What is Earnings Season?

Earnings season refers to the months of the year during which most quarterly corporate earnings are released to the public. Earnings season generally begins in the month following most major companies' 澳洲幸运5官方开奖结果体彩网:fiscal quarters. This means that earnings seasons typically fall in January, April, July, and October, because firms need time after each quarterly 澳洲幸运5官方开奖结果体彩网:accounting period ends to put together their earnings reports.

When is Earnings Season?

The unofficial kickoff to earnings season is the release of earnings by Alcoa (NYSE: AA), an a🍨luminum producer, as it is one of the first major companies to release earnings after the end of each q🎉uarter. It also coincides with an increasing number of earnings reports being released by other public companies. There is no official end to the earnings season, but it is considered to be over when most major companies have released their quarterly earnings reports. It generally occurs about six weeks after the start of the season.

For example, for the fourth quarter, you will often see an increasing number of earnings reportඣs released in the second week of January (Alcoa typically releases at the start of the second week). About six weeks later, or near the end of February,🍬 the number of earnings reports starts to decrease to pre-earnings season levels. There is also very little time between each earnings season. For example, the earnings season for the first quarter begins in early April, which is a little over a month after the end of the fourth quarter earnings season.

Although most companies are on a standard calendar year, some major public companies have fiscal years that do not correspond with a calendar year. For example, Walmart (NYSE: WMT) has a fiscal year end of January 31. This later fiscal year end date allows ample time following the holiday season in order to fully capture all holiday purchases in year end profits. Therefore, Walmart will likely release its earn🐭ings to the public toward the end of a typical earnings season.

Earnings Season and Investors

Earnings season is easily the busiest times of the year for those who work in and watch the markets, as virtually every large 澳洲幸运5官方开奖结果体彩网:publicly traded company will report the results of their last quarter. Analysts and managers typically set their guidelines and estimates to correspond to specific quarters or 澳洲幸运5官方开奖结果体彩网:fiscal year endings, so the results reported by f𒆙irms during earnings season often have a big role in the performance of their stocks.

Some analysts like to calculate a company's 澳洲幸运5官方开奖结果体彩网:earnings before taxes (EBT). This is also referred to as pre-tax income. Some analysts like to see 澳洲幸运5官方开奖结果体彩网:earnings before interest and taxes (EBIT). Still other analysts, mainly in industries with a high level of 澳洲幸运5官方开奖结果体彩网:fixed assets, prefer to see earnings before interest, taxes, depreciation, and amortization, also known as EBITDA. All three measures d꧋epict varying degrees of ඣprofitability.

As earnings season approaches, many analysts will conduct 澳洲幸运5官方开奖结果体彩网:intrinsic valuations to determine if the current market price of a company’s stock is over- or under-valued. This informs investors whether or not to purchase, sell, or hold the stock. 澳洲幸运5官方开奖结果体彩网:Fundamental analysts will look at the qualitative (business model, governance, and industry factors) and quantitative (ratios and 澳洲幸运5官方开奖结果体彩网:financial statement analysis) aspects of a business. The discounted cash flow model is one commonly used valuation tool, which relies on a company's 澳洲幸运5官方开奖结果体彩网:free cash flow and 澳洲幸运5官方开奖结果体彩网:weighted average cost of capital (WACC).

Earnings Calls

During earnings season, 澳洲幸运5官方开奖结果体彩网:investor relations teams will set up 澳洲幸运5官方开奖结果体彩网:earnings calls, where the public can dial in and listen to the executive ꦏteam describe the company’s results for that quarter. Topics generally covered during earnings calls include a discussion of financial performance, any management changes, changes in corporate governance, legal involvement, industry changes, and more. Many different measures of earnings exist, and mana🍎gement usually discusses the context for a company’s results.

The vast majority of publicly listed companies host earnings calls, though smaller companies with minimal investor interest may be exceptions. Many companies also provide a phone recording or presentation of the earnings call on their corporate websites following the actual call, making it possible for potential investors or those who could not log in to access this information. You can also 澳洲幸运5官方开奖结果体彩网:access the SEC's EDGAR system, 🏅which is the most comple⛄te resource for all earnings reports.