What Is Earnings Season?

Earnings season is the time each quarter when most publicly traded companies report their quarterly or annual earnings. It is generally when most volatility happens at the individual stock level.

Let's go over the timing of earnings season and how it can affect your investment.

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Person tracking stock prices on a computer screen. — Image source: Getty Images

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Fiscal Quarter

In the financial world, a quarter refers to a three-month period used for reporting and recording financial performance, typically representing one-fourth of a company's fiscal year.

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Some companies get their earnings together and report right away in those first few weeks, but others wait as long as two months after the quarter to release earnings. It's a lot of work to close accounts, get an audit done if it's required, and have a lawyer put together the filings required by the Securities and Exchange Commission. If you own a wide range of stocks, it's possible that you would be in earnings season more often than not.

Here are the general date ranges for earnings season for each quarter (note that companies with an unusual fiscal quarter may report on a different schedule):

First quarter (ends March 31): April 15 to May 31
Second quarter (ends June 30): July 15 to Aug. 31
Third quarter (ends Sept. 30): Oct. 15 to Nov. 30
Fourth quarter (ends Dec. 31): Jan. 15 to Feb. 28

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Netflix earnings press release — Source: Netflix.com

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Netflix (NFLX -1.70%) reported results on a Tuesday in July. You'd think Netflix would qualify as a stodgy old stalwart that your grandparents have owned for, well, 16 years by this point. But the stock market reacted strongly to the report, sending the shares down from $531 per share to $513 in one day.

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Docusign earnings release. — Source: DocuSign.com

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DocuSign (DOCU +0.58%) is one of the companies with a weird fiscal quarter end; its second quarter ends on July 31. DocuSign reported 50% growth in revenue, and its stock responded with a 5% jump.

These aren't the types of big moves many traders and investors are used to. Netflix had a meh earnings report and fell just 3%; DocuSign blew out revenue growth and jumped 5%. Both of these reports happened following years of strong upward movement for both stocks. It's possible the market is fatigued by this trend, and there just wasn't enough volume for a strong move either way.

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About the Author

Mike Price is a 23 year-old Masters of Finance graduate who first started learning about investing on the Motley Fool when he was 13. He is currently seeking a job.

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Mike Price has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Docusign and Netflix. The Motley Fool has a disclosure policy.