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What is Earnings Season?

Financial results are reported each quarter.

Provided by TechGirl Financial

Every few months, you may hear the phrase “we’re entering earnings season” as you read financial news.

But what exactly is “earnings season” and why is it important to Wall Street?

Earnings season is the period of time when a majority of publicly traded companies release their quarterly financial reports. Companies often go into great detail about the forces that influenced their business for the prior three months, and some may provide guidance about what lies ahead.

Typically, earnings season starts several weeks after the calendar quarter comes to a close. For example, earnings season for the second quarter starts in mid-July. The majority of companies are expected to release their earnings over the next six weeks. In the calendar-quarter ended March 31, 2020, 90 percent of the companies in the Standard & Poor’s 500 reported financial results by May 15, 2020.1

For years, the nation’s largest banks have kicked off earnings season. Banks are an important economic bellwether since they touch every part of the U.S. economy.2

Following the banks, a wide variety of individual companies start to release results. Wall Street analysts prepare forecasts for many companies, and investors may reward companies that report numbers above expectations. Similarly, investors may lose confidence in some companies that come in below the consensus.

As earnings season gets underway, you can expect to hear some upbeat comments about the quarter. But you should also brace for some negative reports. If you hear some commentary that is confusing, talk to your trusted financial professional. They will welcome the chance to talk about what earnings are saying about the overall economic outlook.

Kim Gaxiola, CFP® may be reached at 800.584.3652 or at kim@techgirlfinancial.com

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
Registered Representative of and securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment advisory services offered through Cambridge Investment Research Advisors Inc., a Registered Investment Advisor. TechGirl Financial™ and Cambridge Investment Research, Inc., are not affiliated companies.
Citations.
1. FactSet.com, May 15, 2020
2. MarketPlace.org, July 13, 2020

earnings, financial markets, wall street

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Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Advisors Services through Cambridge Investment Research Advisors, a Registered Investment Advisor.

Tech Girl Financial is not affiliated with Cambridge. Check the background of this investment professional on FINRA's BrokerCheck.
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