Earnings season is one of the most exciting times of the year for investors. And the good news is it happens four times a year. But what do earnings seasons mean for you and your portfolio? In this article, you will find all the information you need to know about these seasonal events and their potential impact on your portfolio.
What is an earnings season?
Earnings season is a time of the year when most publicly traded companies release their quarterly financial results. It means they open their books to the world, showing them how they have done in the past 3 months.
During earnings season, companies also go into great detail about the forces that influenced their business the past three months and offer forecasts about what they think lies ahead for them.
What happens during earning seasons?
Many companies hold a call to present earnings to investors and analysts. This is called a “conference call” and it’s public! So if you’re interested in it, you can always tune in.
This typically coincides with a public release of the financial results contained in a report. You will usually be able to find the link to the conference call and the reports on the investor relations section of the company’s website.
When are earnings seasons?
It feels like there’s always an earnings season around the corner! Just as the announcements from the last quarter’s start to win down, the next set of releases gets ready to begin.
There are no official dates for the beginning or end of earnings season but they start about two weeks after the end of the calendar quarter. That means earnings releases begin around the middle of January, April, July, and October. The torrent of companies’ releases then takes place over about six weeks.
How can you know when a specific company is publishing its results? We cover all key earnings dates in the calendar section of your weekly BUX Breakdown. You can also search for other earnings announcements on specialised publications such as Bloomberg.
What do earning seasons mean for you and your portfolio?
Earnings season is all about whether companies’ expectations match up with reality. The share price might experience some volatility if a company’s results beat or miss analysts’ expectations. That could also happen if the company’s management makes comments which surprise shareholders.
Importantly, even if you don’t hold shares of a specific company, you might still see fluctuations in your portfolio during earnings season. That’s because of the ripple effect one company’s results may have on others in its sector and the broader market.
This volatility around earnings season can lead to lucrative opportunities in the markets for active investors and traders. These opportunities also bring high risks. If you’re a long-term investor, it’s important to avoid making long-term investment decisions based on short-term information.
However you invest, keeping your eyes open for earnings season is a good idea. Earnings season can help investors understand how information flows between various players in the market. Watching how all of this unfolds can make you a more well-informed investor.
In our next article, we’ll dig deeper into how to best seize the earning seasons’ opportunities.
In the meantime, have a good week on the markets!
BUX Zero Team
All views, opinions, and analyses in this article should not be read as personal investment advice and individual investors should make their own decisions or seek independent advice. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.