During the course of a fiscal year, a company will report earnings on a total of four separate occasions — three quarterly statements filed as 10-Qs, and one annual report with fourth quarter data included, filed as a 10-K. Earnings are heavily scrutinized as they show a company's profitability compared to analyst estimates and company guidance. The SEC requires companies to file 10-Qs no later than 45 days after the end of a quarter, and 10-Ks must be being submitted no later than 90 days following a company's fiscal year-end.

Why an Earnings Release May Be Delayed

Occasionally, companies will postpone an earnings release for some unforeseen reason. However, most often, the delay will be a result of the company not completing the report on time due to audits taking longer than expected, inexperienced officers completing their first report and the firm losing some or all of its financial data due to a technical error, fire or theft. Although a company may file a report later than expected, this will sometimes have an impact on its stock price.

If a company announces that it is filing later than expected, investors may take this as a sign of a negative earnings surprise, and a sell-off may follow. Price reductions can be further enhanced by noise traders and technical analysts who may follow those who are selling their stock.

What Should Investors Do?

The smart investor should keep in mind that the best thing for them to do during an occurrence like this is to consider why the company is delaying its release, and/or wait for information to be released concerning whether management's reasons are valid. It's also important to see how the new data corresponds to the original investment thesis.

One possible winner in this scenario is the contrarian investor — an investment style that goes against prevailing market trends — because the contrarian may pick up the now relatively cheaper stock, which will enhance any gains going forward.

(To learn more about earnings, read Earnings: Quality Means Everything, or Everything You Need to Know About Earnings.)