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Get Ready for Earnings Season |
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'Tis the season to crunch numbers...fa la la la la la la la la. Companies reporting earnings...fa la la la la la la la la.
That's right. It's earnings season again. But what exactly is earnings season?
What is Earnings Season
Earnings season is the period of time when companies announce their earnings for the previous quarter. Earnings season comes around at the beginning of each quarter of the year. Earnings season starts four times per year:
- January 1 (Companies begin announcing earnings for Q4 of the previous year)
- April 1 (Companies begin announcing earnings for Q1 of the current year)
- July 1 (Companies begin announcing earnings for Q2 of the current year)
- October 1 (Companies begin announcing earnings for Q3 of the current year)
The quarters are based on a calendar year that is broken up as follows:
- Quarter 1 (Q1) --- January, February and March
- Quarter 2 (Q2) --- April, May and June
- Quarter 3 (Q3) --- July, August and September
- Quarter 4 (Q4) --- October, November and December
Earnings season is called a season because companies aren't required to report their earnings on the first day of next quarter. They have some flexibility on when they want to share their numbers. Typically, companies like to announce their earnings as quickly as possible, but depending on the complexity of the company, it can take a while to accurately compile and audit the information.
What to Watch for in Earnings Season
When earnings season rolls around, you should be watching for three things:
1. Earnings reports for companies you own stock in
2. Earnings reports for companies in your watchlist
3. Earnings reports that make the news that may lead to new stocks you can put in your watchlist
For example, if you own an mutual fund or an ETF that tracks the Dow Jones Industrial Average, you will want to pay close attention to Tuesday, July 8 because the first company that is part of the Dow Jones Industrial Average start to announces its earnings that day.
Earnings Season Conclusion
You have nothing to fear from earnings season, but you do need to pay attention. You should never be caught off guard by an earnings announcement from a company in which you own stock. The earnings calendar is published well in advance.
Check with your broker to see if they have an earnings calendar. If your broker doesn't have one, you can always use the free earnings calendar at www.earnings.com.
Good luck, and happy earnings season.
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