Following the end of each calendar quarter publicly traded companies announce their financial results, generally in summary form, with the greatest focus on revenue and earnings. It occurs on a specific date during earnings season, and is preceded by earnings estimates coming from equity analysts. The share price typically moves up or down based on the company’s performance as the information impacts trading decisions. Analysts derive earnings per share estimates using forecasting models, management guidance, and fundamental information. These estimates can change in the weeks leading up to the announcement.
The release of the financial results is accompanied by an “earnings call.” The financial results can be released no more than 48 hours prior to the call. On one side of the teleconference are officers of the company, typically the Chief Executive Officer (CEO), Chief Financial Officer (CFO), vice president of operations, and both human resources and legal representatives. On the other side are the analysts who listen to the results and participate in asking questions (Q&A). Not long after the call, the quarterly financial statement detail and footnotes are filed (8-K and Regulation Fair Disclosure) with the Securities and Exchange Commission. Those documents provide far more detail for analysts to corroborate claims made on the calls, and even to detect issues that were never addressed on the call.
