Earnings reports typically occur every quarter (3 months). It is cautioned to stay away from stocks during earnings reports as it can have dire consequences should a company not meet the expectations of investors or the market.

• The EPS determines the profitability per share (revenue / # of outstanding shares)

• The announcement of the EPS is just one step. See the Dividend Announcements and Payments for more information.

Earnings Calendars

• Earnings Whisper Website

• Earnings Whisper Twitter (@eWhispers) - they post the current companies who will be holding their earnings before or after market for the current week

• Earnings Per Share (EPS) - shows the profitability of a company in relationship to the number of shares outstanding

• Growth Percentage - investors want to see that the company is growing in terms of revenue, net income (revenue - expenses; which increases EPS), and the comparison of growth from the same period last year or for the entire year

  • • For growth percentage we do not compare last quarter to the quarter since businesses are cyclical

    • Think of businesses who do more sales during different times of the year (e.g. summer, winter, Christmas)

• Direction for the next quarter/rest of year/next year

  • • Even if a company is performing well or not performing well, direction during any time and especially difficult or uncertain times is important.

    • Having little to no direction on high earnings (beating expectations) and higher growth (compared to last year) can create a selloff if investors feel uncertain about the future of the company.

    • Facebook drops 26% on earnings - FB reports a drop in revenue in part to Apple allowing iPhone users to limit apps from tracking their online activity (Facebook says Apple's change will cost them $10B in 2022).

    • Netflix loses 200,000 subscribers and expects to lose 2 million worldwide sends. Sends stock plummeting 35% after earnings announcement.

• Dividends - Companies publicly traded in the market have the sole purpose of pleasing their shareholders by either growing the company (share price) or through paying dividends (payment for each share; 50 cents x 100 shares = $50 in dividends). Some companies are slowly focused on the growth of the company and share price and not dividends (eg. TSLA, AMZN, GOOG).

• Often, investors are buying up shares leading up to earnings in hopes of a positive earnings report.

• Some will buy and hold a month or more out to catch the rise and sell their position right before the earnings report to take profits. This is known as "Buying the hype, selling the news" (TSLA plummets after earnings reports).

• For option traders, people buy far out to take advantage of volatility rising as earnings report and selling prior to earnings to make a profit off any rise in price and volatility.

• In this situation, people buy into what could be upcoming (eg. earnings, conferences, partnerships) and then sell off once the news hits.

• If the news/earnings is below expectations, the selloff of the runup prior to the report takes place.

• If the news/earnings are on par with what was expected, the market could selloff if they believe the run up was greater than the news from the report.