What is a 'Quarterly Earnings Report'

The quarterly earnings report is a quarterly filing made by public companies to report their performance. Earnings reports include items such as net income, earnings per share, earnings from continuing operations and net sales. By analyzing quarterly earnings reports, investors can begin to gauge the financial health of the company and determine whether it deserves their investment.

BREAKING DOWN 'Quarterly Earnings Report'

Fundamental analysts believe that good investments are identified with hard work in the form of ratio and performance analysis. One of the most important numbers for analysis is earnings-per-share, because it provides a ratio of the company's earnings compared to its shares outstanding. In other words, it compares earnings to market capitalization. While the number can be manipulated, it remains the holy grail of performance indicators.

The Importance of the Quarterly Earnings Report

Every quarter, analysts wait for the announcement of company earnings, and analysts then base buy-and-sell recommendations on this announcement. The announcement of earnings for a large capitalization stock can move the market, and stock prices can fluctuate wildly on days when the quarterly earnings report is released. The ability to provide accurate estimates can greatly advance an analyst's career; likewise, a bad estimate can ruin one. In fact, the ability to beat earnings estimates is more important than the company's ability to grow earnings over the prior year. For example, if the company grows earnings, but fails to meet analyst estimates, it may result in a sell-off of the stock. In many ways, analysts estimates are just as important as the earnings report itself.

Quarterly Earnings Report Summary

Quarterly earnings reports generally provide a quarterly update of all three financial statements, including the income statement, the balance sheet and the cash flow statement. However, the number that analysts wait for is earnings. Every quarterly earnings report provides investors with three things: an overview of sales, expenses, and net income for the most recent quarter. It may also provide a comparison to the previous year, and possibly to the previous quarter. Some quarterly earnings reports include a brief summary and analysis from the CEO or company spokesman, as well as a summary of previous quarterly earnings results.

The quarterly earnings report is generally backed up by the 10Q, a legal document that must be filed with the Securities and Exchange Commission every quarter. The 10Q is more comprehensive in nature and provides additional details behind the quarterly earnings report. The exact date and time of the quarterly earnings report announcement is obtainable by contacting an investor relations department. The 10Q is usually published a few weeks after the quarterly earnings report.

  1. Earnings

    The amount of profit that a company produces during a specific ...
  2. Earnings Estimate

    An earnings estimate is an analyst's estimate for a company's ...
  3. Quality Of Earnings

    The amount of earnings attributable to higher sales or lower ...
  4. Earnings Announcement

    An official public statement of a company's profitability for ...
  5. SEC Form NT 10-Q

    An SEC form required for companies that will not be able to submit ...
  6. Earnings Call

    A conference call between the management of a public company, ...
Related Articles
  1. Insights

    Earnings Forecasts: A Primer

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

    Strategies For Quarterly Earnings Season

    Breeze through consensus estimates like the biggest Wall Street forecasters.
  3. 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.
  4. Insights

    Is It Time To End Quarterly Earnings Reporting?

    The chorus for removing the quarterly earnings requirement for companies is growing louder. We examine the pros and cons of the issue.
  5. Investing

    The Flow of Company Information

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

    IBM Stock: An Earnings Case Study

    Learn the main drivers behind IBM's earnings model and why analysts predict a decline in 2016 followed by a strong recovery in 2017.
  7. Investing

    Understanding The Top SEC filing forms

    It's easier than ever to keep track of your SEC filing status online.
  8. Investing

    SEC Filings: Forms You Need To Know

    The forms companies are required to file provide a clear view of their histories and progress.
  9. Investing

    Speed-Read SEC Filings for Hot Stock Picks

    SEC filings can be a headache. Read out how to speed-read through your stock research.
  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 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. What is the difference between a quarter and a year in finance?

    Examine the difference between a fiscal quarter and a fiscal year. Learn why investors examine both quarterly and annual ... Read Answer >>
  4. When does Q4 start and finish?

    Learn about different financial years used by various companies. Explore when the fourth quarter begins on October 1st and ... Read Answer >>
  5. When does Q2 start for most companies?

    Learn about the fiscal year of different companies and when the second quarter begins. Explore why analysts often prefer ... Read Answer >>
  6. What is the difference between earnings and income?

    See how earnings and income are different and when they are used in relation to personal finance versus a business' financial ... Read Answer >>
Hot Definitions
  1. Standard Deviation

    A measure of the dispersion of a set of data from its mean, calculated as the square root of the variance. The more spread ...
  2. Entrepreneur

    An Entrepreneur is an individual who founds and runs a small business and assumes all the risk and reward of the venture. ...
  3. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  4. Perfect Competition

    Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and ...
  5. Compound Interest

    Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods ...
  6. Income Statement

    A financial statement that measures a company's financial performance over a specific accounting period. Financial performance ...
Trading Center