The end of the third quarter was notable for more than rising stock prices. It was also quiet.
As a quarter wraps up -- as quarter three did Sept. 30 -- companies usually know a few weeks before the quarter's end whether results will meet expectations. This is why the end of a quarter can bring about a slew of "earnings warnings," or admissions that results were not as strong as hoped.
Such warnings typically begin within a week or two of a quarter's end, and keep arriving a week or two into the next quarter. By then, however, most large warnings are already out, because actual quarterly announcements are scheduled soon. This means that we just passed through prime "earnings warning" season with few big damaging pre-announcements at all.
Sure, there was Sun Microsystems
For the most part, though, we heard nothing from the companies leading the market. And that's good.
By mid-October, we'll be in the heart of quarterly releases, hearing summer results from thousands of companies, and more importantly, hearing forecasts for the typically stronger year-end quarter ahead. In the last two years, we've seen hundreds of companies pre-announce poor results each quarter, knocking everything lower. This year, disappointments have greatly dwindled. And this quarter, the pre-announcement season is so far one of the quietest in recent memory.
All of which goes to argue that the quarterly results we're about to witness will live up to, and in some cases exceed, expectations. See, silence can be golden.