With hundreds of companies having already reported quarterly results, we're now in the heart of earnings season. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed, knee-jerk reaction that turns out to be exactly the wrong move to the news.

Let's turn to Standard Pacific (NYSE:SPF). The homebuilder has suffered through the long housing bust, but finally, some signs of life are emerging, and the stock has reacted very favorably to the news. Let's take an early look at what's been happening with Standard Pacific over the past quarter and what we're likely to see in its quarterly report on Thursday.

Stats on Standard Pacific

Analyst EPS Estimate

$0.07

Change From Year-Ago EPS

75%

Revenue Estimate

$373 million

Change From Year-Ago Revenue

27.2%

Earnings Beats in Past 4 Quarters

2

Source: Yahoo! Finance.

Can Standard Pacific keep building?
Analysts have been rock-solid on their ideas about Standard Pacific, with earnings-per-share estimates not budging at all in the past three months. Investors, though, have been increasingly optimistic, as the shares have soared more than 22% just since late October.

Across the industry, homebuilders have seen massive improvement in the past year. The positive combination of rock-bottom mortgage rates and the perception that home prices have flattened have greatly boosted the amount of home-shopping traffic, especially among cash-rich investor-buyers who've raced in to pick up bargains in particularly hard-hit areas. With Standard Pacific based in Southern California and serving many formerly hot markets like Arizona, Florida, and Nevada, it's primed to benefit more than many more broadly diversified companies.

Standard Pacific has had to overcome some obstacles that its peers haven't. By aiming at the middle and higher end of the market, KB Home (NYSE:KBH) and Lennar (NYSE:LEN) have seen improving delivery rates, sale prices, and margins combine to produce better results, capitalizing on the fact that high-end households haven't been hurt as badly by the recession. But Standard Pacific and Hovnanian (NYSE:HOV) have more of an entry-level focus, and their customer base got crushed by the housing bust and economic recession. So positive news and rising new orders for Standard Pacific are exceptional, and if the company can continue that trend this quarter, it could mean a turning point in the market.

The key for Standard Pacific's earnings report is to remember that the stock has already priced in substantial gains for the homebuilder. Anything that falls short of those high expectations could lead to shares giving back a big part of those gains. 

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Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.