Dictionary / Financial statements
What Is an Earnings Report?
An earnings report is a company's report card. Public companies release one every three months to show their revenue, profit and outlook.
When earnings reports come out
US companies report four times a year, a few weeks after each quarter ends. The fourth one comes with the full annual report. Most companies also hold an earnings call, where managers explain the results and answer questions from analysts.
What is inside
- The income statement: revenue, costs and profit.
- The balance sheet: what the company owns and owes.
- The cash flow statement: where cash came from and went.
- Guidance: what managers expect for the next quarter or year.
Why stocks jump on earnings day
Analysts publish forecasts for revenue and EPS. The price already reflects those guesses. If results or guidance beat the forecasts, the stock often jumps. If they miss, it can fall hard, even when results are good.
How to read one as a beginner
Start with three questions. Is revenue growing? Is profit growing? What do managers expect next? Then compare with the same quarter last year, not just the last three months.
See it in real companies
Open a company to see what it sells and how it makes money.