A:

The date and time that a company releases its earnings is very important because investors looking to buy or sell the particular security are counting on the information to help make a decision. When the earnings are released, the price of the security is almost always affected if it differs from the expected amount; this is often known as a surprise.

When an earnings deadline is missed, serious problems can occur in the stock market, as investors begin to worry about what might have caused the company to miss the deadline. Even if the reason is completely innocent, the notion that something MUST be wrong will always be in the back of investors' minds. Missing deadlines will almost always have a negative effect on the price of the stock, and volatility will surely increase.

However, stock exchanges have rules in place to protect investors from this volatility. For example, Nasdaq stock market rules say that missing a deadline could result in the market immediately suspending trading and delisting the company's common stock. This rarely happens, as companies are usually able to request an extension to get the financial statements released prior to being delisted.

If the company you own shares in has just missed its earnings deadline, it may not be reason to panic and dump the lot right away, but it should be a signal to watch it closely. You do not want to be left holding the bag if it turns out that the financial statements were delayed for a disastrous reason, such as accounting fraud.

Learn more about this in Strategies For Quarterly Earnings Season and The Flow Of Company Information.

RELATED FAQS
  1. Health problems caused me to take my RMD after the deadline. Can I appeal my case ...

    When you missed your required minimum distribution (RMD), you should have sent in a letter of explanation and filed IRS Form ... Read Answer >>
  2. What happens if a company's earnings fall short of estimates?

    Understand what it means when a company "misses earnings" and does not live up to consensus estimates, and learn why most ... Read Answer >>
  3. When is earnings season?

    Earnings season is the period of time during which a large number of publicly traded companies release their quarterly earning ... Read Answer >>
  4. I own shares of a company that just received a delisting notice from Nasdaq. Does ...

    Let's start by walking through the reasons for listing requirements and what happens when a company's stock is delisted from ... Read Answer >>
  5. What can I learn about a company by studying its earnings report?

    Find out how to review an earnings report by looking for key information about cash flow and margins, and discover the importance ... Read Answer >>
Related Articles
  1. Managing Wealth

    How to Use Earnings Season to Make Better Decisions

    Earnings season reflects the state of the stock market, but also demonstrates how the overall economy is performing.
  2. Investing

    Digging For Profitable Delistings

    Deregistration can provide opportunities for savvy investors. We'll show you how to cash in.
  3. Investing

    4 Things To Know About Earnings Season

    Investors should know that earnings reports are not just about the earnings.
  4. Investing

    Everything Investors Need To Know About Earnings

    We go over the concepts behind the excitement over the most important figure in the stock market.
  5. Investing

    The Flow Of Company Information

    Learn how to gather all the pieces before you start to put together your puzzle.
  6. Investing

    Strategies For Quarterly Earnings Season

    Breeze through consensus estimates like the biggest Wall Street forecasters.
  7. Investing

    Tips For When To Buy, Sell Or Hold

    Knowing how to make sound snap decisions is a must for any broker.
  8. Small Business

    Conference Calls: Press 1 For Investment Insight

    These calls can be an investor's most direct line to information about a company's operations.
  9. Taxes

    Get a 6-Month Tax Extension

    Discover how to get some extra time from the IRS, without paying a hefty penalty for the privilege.
  10. Investing

    Why Companies Delisted from Indexes Can Be a Buy (OI)

    Learn about a value-investing strategy that takes advantage of stocks that may represent a bargain when they're delisted from a benchmark index.
RELATED TERMS
  1. Delisting

    The removal of a listed security from the exchange on which it ...
  2. Accounting Earnings

    The amount of money a company has earned during a given period, ...
  3. Earnings

    The amount of profit that a company produces during a specific ...
  4. Drop Dead Date

    A provision in a contract or agreement that stipulates a finite ...
  5. Street Expectation

    The average estimate of a public company’s quarterly earnings ...
  6. Quarterly Earnings Report

    A quarterly filing made by public companies to report their performance. ...
Hot Definitions
  1. Investment

    An asset or item that is purchased with the hope that it will generate income or appreciate in the future. In an economic ...
  2. Redlining

    The unethical practice whereby financial institutions make it extremely difficult or impossible for residents of poor inner-city ...
  3. Nonfarm Payroll

    A statistic researched, recorded and reported by the U.S. Bureau of Labor Statistics intended to represent the total number ...
  4. Conflict Theory

    A theory propounded by Karl Marx that claims society is in a state of perpetual conflict due to competition for limited resources. ...
  5. Inflation-Linked Savings Bonds (I Bonds)

    U.S. government-issued debt securities similar to regular savings bonds, except they offer an investor inflationary protection, ...
  6. Peak Globalization

    Peak globalization is a theoretical point at which the trend towards more integrated world economies reverses or halts.
Trading Center