Earnings calendar

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When Is Earnings Season?

Earnings season is the period of time during which a large number of publicly traded companies release their quarterly earning reports. In general, each earnings season begins one or two weeks after the last month of each quarter (December, March, June, and September).

Thus, look for the majority of public companies to release their earnings in early to mid-January, April, July, and October. It is important to note that not all companies report during earnings season because the exact date of an earnings release depends on when the given company’s quarter ends. As such, it is not uncommon to find companies reporting earnings between earnings seasons.

Kicking off the Season

The unofficial kickoff to earnings season is the release of earnings by Alcoa (NYSE: AA), which is a major aluminum producer and Dow Jones Industrial Average component, as it is one of the first major companies to release earnings after the end of each quarter. It also coincides with an increasing number of earnings reports being released. There is no official end to the earnings season, but it is considered to be over when most major companies have released their quarterly earnings reports, which generally occurs about six weeks after the start of the season.

For example, for the fourth quarter, you will often see an increasing number of earnings reports released in the second week of January (Alcoa typically releases at the start of the second week). About six weeks later, or near the end of February, the number of earnings reports starts to decrease to pre-earnings season levels. There is also very little time between each earnings season. For example, the earnings season for the first quarter begins in early April, which is a little over a month after the end of the fourth quarter season.

What Earnings Season Means for Investors

This is a very active time in the market as participants (analysts, traders, and investors) review the earnings reports, which may affect their positions on or in a company. You can often see a lot of movement in the shares of companies releasing reports as the market reacts to the new data. It is not unheard of to see shares jump 20% or more or to see them fall by this same amount. It is also a highly active time for the financial news media, such as CNBC and The Wall Street Journal. There is extensive media coverage of the major earnings releases from a general recap of the earnings to report on whether the companies missed, met, or beat analyst expectations.

Some traders look forward to earnings season, as it can be a period where they can confirm the positions they places. Shorting a stock before earnings and watching the price drop can be beneficial, as the psychological drop will usually trigger a sell-off. Conversely, a ramping up in production or revenue could result in a swift upward trajectory or stock price. Other investors sit out the season entirely, as there are too many “human” factors at play.

When Must a Company Announce Earnings

Here’s when to expect quarterly and annual earnings reports

When a company goes public, it is required to follow the strict rules of the Securities and Exchange Commission (SEC). Not the least of these rules require companies to file earnings reports after the end of their first three quarters, and both quarterly and annual reports after their fiscal year ends.

Those reports are public records and are intended to keep the company’s investors and potential investors up to date on the company’s performance. 

The Timing

The timing varies a little. The old standard required companies to file earnings reports no later than 45 days after the end of their first three quarters, and both quarterly and annual reports no more than 90 days after their fiscal year ends.

In 2002, the SEC decided to make information available to the public in a more timely manner. The new rules tightened these 45- and 90-day requirements to 35 and 60 days, respectively.

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The faster filing deadlines are required only of the public that have a public float of at least $75 million and has been subject to the Securities Exchange Act of 1934 for at least 12 months. The public float is the value of all shares that are in the hands of outside investors. 

The Contents

A quarterly report must include a straightforward accounting of a company’s gross revenue, net profit, operational expenses, and cash flow. It also generally provides some brief interpretations of the challenges and opportunities of the current quarter from the viewpoint of management. 

The annual report must include all of those numbers for the year as a whole. It is a larger, glossier, and more elaborate production, intended for investors and potential investors, and includes promotional material about the company and its products. 

Other Earnings Information

In reality, the companies also publish press releases that boil the earnings information down into an easily digestible form. These press releases may cast the previous quarter in the best light possible, but they have to stick to the facts.

In addition, the company’s top executives are expected to sit down for lengthy question-and-answer sessions with major shareholders and the media. After the end of the fiscal year, they also publish glossy magazine-style corporate reports that are sent to all shareholders and include the financial information as well as information about the company.

The Forms

The essential SEC requirements are that each public company file quarterly earnings reports on Form 10-Q or 10-QSB and yearly earnings reports on Form 10-K or 10-KSB.   

A company can announce earnings publicly whenever it chooses, provided it follows the timing guidelines set by the SEC.

If you’re interested in a specific company, most corporate websites list the release dates of their upcoming earnings reports, and virtually all carry the reports in full.

Real-World Impact

The SEC reporting requirements effectively rule the calendar year of the stock market. Company quarterly reports are eagerly anticipated and are subject to heavy speculation. The reports arrive on schedule and in an avalanche, and each is followed by a wave of expert analysis and trader re-positioning. The earnings are then followed by public conference calls between top corporate executives and active investors in which the prospects for the next quarterly report are discussed. And that reboots the anticipation phase all over again.

Will Itron (ITRI) Beat Estimates Again in Its Next Earnings Report?

Zacks Equity Research February 06, 2020

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Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? Itron ( ITRI – Free Report) , which belongs to the Zacks Electronics – Testing Equipment industry, could be a great candidate to consider.

This energy and water meter company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. The average surprise for the last two quarters was 15.52%.

For the last reported quarter, Itron came out with earnings of $1.13 per share versus the Zacks Consensus Estimate of $0.89 per share, representing a surprise of 26.97%. For the previous quarter, the company was expected to post earnings of $0.49 per share and it actually produced earnings of $0.51 per share, delivering a surprise of 4.08%.

Price and EPS Surprise

Thanks in part to this history, there has been a favorable change in earnings estimates for Itron lately. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is positive, which is a great indicator of an earnings beat, particularly when combined with its solid Zacks Rank.

Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Itron has an Earnings ESP of +7.75% at the moment, suggesting that analysts have grown bullish on its near-term earnings potential. When you combine this positive Earnings ESP with the stock’s Zacks Rank #3 (Hold), it shows that another beat is possibly around the corner. The company’s next earnings report is expected to be released on February 27, 2020.

With the Earnings ESP metric, it’s important to note that a negative value reduces its predictive power; however, a negative Earnings ESP does not indicate an earnings miss.

Many companies end up beating the consensus EPS estimate, but that may not be the sole basis for their stocks moving higher. On the other hand, some stocks may hold their ground even if they end up missing the consensus estimate.

Because of this, it’s really important to check a company’s Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they’ve reported.

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