Notable Earnings Frequently Asked Questions
What are Earnings Announcements?
An earnings announcement details a company's performance over a given period, usually three months or a year. Upcoming earnings announcements are some of the most awaited reports as they help paint a clear picture of a company’s performance prospects.
The announcement can be made after the markets close or before the markets open but on a specific date communicated to shareholders in advance. Earnings reports upcoming often cause some stocks' share price to increase up to and slightly after the earnings are released.
Days leading to an earnings report, the market is usually filled with speculation among investors and analysts' estimates on how a company is likely to perform. Likewise, earnings reports must come with accurate, detailed information as they are official statements of a company's profitability that investors rely on to make informed investment decisions.
While analysts' estimates of the upcoming earnings report can be off the mark, they can be accurate at times.
What are notable earnings?
Notable earnings today is a saying used to denote important earnings reports likely to trigger significant market movements. In most cases, notable earnings are those of market leaders whose outcomes often paint a picture of how other companies are likely to perform.
Tech stocks earnings reports are some of the most waited as they tend to influence trading activities in the vast capital markets. Likewise, utility companies' earnings also paint a clear picture of how an economy is performing and likely to perform in the future.
Notable earnings reports tend to trigger wild swings conversely, resulting in unique trading opportunities that investors look to profit from during the short earnings sessions. Some of the biggest media outlets in the business sphere are known to list notable earnings today that investors should pay close attention to during the week or the day.
What are notable earnings very important?
Notable upcoming earnings are important given the trading opportunities they often give rise to. Such reports generate opportunities for buying stocks in case of earnings beat or act as a signal to trim or exit some positions in case of disappointing reports.
Likewise, investors pay close watch to notable earnings calendar to be in the know of potential market-moving earnings report worth trading.
What parameters to monitor in earnings reports?
While earnings reports present a rosy picture of a companies' financial position, it is important to know the parameters to watch out for and their potential impact on the share price. Revenues and earnings per share are crucial. It is important to determine whether earnings and revenues topped guidance and beat estimates. The variance in most cases determines how the stock would behave.
In addition, it is important to compare current and previous guidance as it paints a clear picture of how a company is likely to perform. Guidance can have a significant impact on the performance of a stock over the long term.
Similarly, it is important to monitor the balance sheet as it provides a clear picture of the company's underlying health. Cash flow is another important metric to pay attention to as it shows how a company is managing its cash.
Should you trade Pre-Earnings or Into-Earnings, or After-Earnings?
Buying a stock into earnings can be good or somewhere in between as it is difficult to know whether the company’s earnings will beat estimates or come out disappointing. When it comes to trade earnings, it is advisable only to buy pre-earnings if developments heading into the earning season point to potential solid earnings report.
Buying a stock into earnings amounts to speculating on how the company is likely to perform. While the bet can pay off in case of an earnings beat, the outcome can be disastrous in case of disappointing results.
When it comes to trading earnings season, it is best to wait until a company reports its earnings and the market digest the same. Even if the stock was to gap up powerfully, there will always be a pullback that would present an ideal entry point after an impressive earnings report.