Most companies such as Facebook have financial years that end on December 31st. For these companies, the fourth quarter begins on October 1st. Other companies have financial years that end on odd dates; the financial year for Nike ends on May 31, for example. Considering this differing financial schedule, its fourth quarter actually begins on March 1.
All companies with publicly traded securities are required to file Securities and Exchange Commission (SEC) Form 10-K on an annual basis and Form 10-Q on a quarterly basis. Annual and quarterly reports issued by companies include varying levels of details. SEC Forms 10-K and 10-Q require detailed, standardized reporting from all public companies.
Quarterly financial results are almost always accompanied by presentations delivered by company management. Firms also frequently provide forecasts for future financial results during these presentations, which are often followed by conference calls where analysts and investors pose questions to a company's management about performance.
Key financial accounting metrics are closely followed by research firms. These firms may also publish estimates for future financial results, including revenue, earnings, expenses and cash. The estimates made by these research firms are tracked by financial publications which average them to arrive at what is termed "street consensus estimates." Firms that surpass estimates are said to have "beaten the street," while firms that report figures in-line with estimates are said to have "met street estimates." Firms that report figures lower than estimates are said to have "missed street estimates."
Many investors believe that the market's reaction to financial results may be more important than the results themselves. There are times when most of the participants in the market for a stock are expecting a company to beat estimates, and even when the company succeeds in that endeavor, its shares fall in value. There are other times when market participants are not expecting a company to beat estimates, but it does anyway, causing the shares to surge in price.