Quarter - Q1, Q2, Q3, Q4


DEFINITION of 'Quarter - Q1, Q2, Q3, Q4'

A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends. A quarter refers to one-fourth of a year and is typically expressed as "Q." The four quarters that make up the year are: January, February and March (Q1); April, May and June (Q2); July, August and September (Q3); and October, November and December (Q4). A quarter is often shown with its relevant year, as in Q1 2015 or Q1/15, which represents the first quarter of the year 2015.


Loading the player...

BREAKING DOWN 'Quarter - Q1, Q2, Q3, Q4'

All public companies in the United States must file quarterly reports (known as 10-Qs) with the U.S. Securities and Exchange Commission (SEC) at the end of each quarter. Each 10-Q contains the public company's unaudited financial statements and company operations information for the previous three months (quarter). 10-Qs are required for the first three quarters of the year. Each publicly traded company must also file an annual report, known as a 10-K, which accounts for the first three quarters with 10-Q reports, as well as the fourth quarter, and will often contain much more detailed information about the company than 10-Ks do.

Companies, investors and analysts often use data from different quarters to make comparisons and evaluate trends. Because there are four quarters in a year, one may evaluate a company’s performance over time with a much higher degree of specificity than if one were doing so on a yearly basis. For instance, an investor may track a company’s performance over the last eight quarters to determine if the company is consistently performing well. Certain businesses or industries, however, may often vary in performance on a seasonal basis. For example, one may expect that an ice cream or smoothie company will do the most business during the summer (quarter 2 and/or 3), so an investor might track these companies’ performance over the past few Q3s for a better view of their progress than if the investor were looking at all four quarters of the year.

On the other hand, many retail companies see a spike in business during the holiday season (Q4), so if one were tracking the performance of retail companies, comparing the performance of recent fourth quarters may be a good decision. Box-office ticket sales are particularly tied to the time of year, with the vast majority of sales taking place in the summer and during the holiday season, with the beginning of the year and the early months of fall traditionally seeing very low sales. Yet, how seasonal companies perform during off-seasons is also very important to consider, as most companies in seasonal industries are active year-round.

Quarterly reports are often an important time for publicly traded companies, as these earnings reports may significantly affect the value of a company’s stock. If a company has had a good quarter, its stock value may increase, but if the company has had a poor quarter the value of its stock may decrease. Analysts’ expectations may come into play here too. If a company’s earnings per share during any particular quarter is higher than predicted by analysts, the company’s stock will likely increase in value, and will likely decrease in value if its earnings per share is less than predicted.

While all companies use this uniform quarter standard, certain governments use different systems. For example, the first quarter of the United States federal government’s fiscal year is October, November and December, Q2 is January, February and March, Q3 is April, May and June, and Q4 is July, August and September. State governments, on the other hand, may decide their own fiscal calendars.

  1. Dividend

    A distribution of a portion of a company's earnings, decided ...
  2. Quarter Over Quarter - Q/Q

    A measure of an investment or company's growth from one quarter ...
  3. Quartile

    A statistical term describing a division of observations into ...
  4. Earnings

    The amount of profit that a company produces during a specific ...
  5. Public Company

    A company that has issued securities through an initial public ...
  6. Generally Accepted Accounting Principles ...

    The common set of accounting principles, standards and procedures ...
Related Articles
  1. Economics

    What Needs to Happen for Oil Prices to Go Up?

    Understand what is happening to global oil prices and why they are so low. Learn about key factors that can lead to the increase of oil prices.
  2. Investing Basics

    What's a Quarter?

    A quarter, often abbreviated “Q,” is a consecutive three-month period that a company uses to report its earnings and dividends.
  3. Markets

    Consumer Spending As A Market Indicator

    What people buy and where they shop can provide valuable information about the economy.
  4. Economics

    Earnings Forecasts: A Primer

    Learn how this key metric is calculated and how it is used to judge market performance.
  5. Investing

    Strategies For Quarterly Earnings Season

    Breeze through consensus estimates like the biggest Wall Street forecasters.
  6. Markets

    Surprising Earnings Results

    Consensus estimates can send stocks spiraling - but are they representing reality?
  7. Charts & Patterns

    Analyzing Chart Patterns

    Learn how to evaluate a stock with a few easy-to-identify patterns.
  8. Investing

    What a Family Tradition Taught Me About Investing

    We share some lessons from friends and family on saving money and planning for retirement.
  9. Economics

    Investing Opportunities as Central Banks Diverge

    After the Paris attacks investors are focusing on central bank policy and its potential for divergence: tightened by the Fed while the ECB pursues easing.
  10. Stock Analysis

    The Biggest Risks of Investing in Pfizer Stock

    Learn the biggest potential risks that may affect the price of Pfizer's stock, complete with a fundamental analysis and review of other external factors.
  1. 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 Full Answer >>
  2. Do I receive the posted dividend yield every quarter?

    First things first: a company with common stock that pays a dividend will typically distribute the dividend every quarter. ... Read Full Answer >>
  3. Can working capital be depreciated?

    Working capital as current assets cannot be depreciated the way long-term, fixed assets are. In accounting, depreciation ... Read Full Answer >>
  4. Do working capital funds expire?

    While working capital funds do not expire, the working capital figure does change over time. This is because it is calculated ... Read Full Answer >>
  5. What is the expense ratio in the insurance industry?

    The expense ratio in the insurance industry is a measure of profitability calculated by dividing the expenses associated ... Read Full Answer >>
  6. How much working capital does a small business need?

    The amount of working capital a small business needs to run smoothly depends largely on the type of business, its operating ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  3. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  4. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  5. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  6. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
Trading Center