Earnings reports are some of the most important sources of information available to stock investors. They give important details about the current state of a business, reveal important financial information, and may include forward earnings and revenue projections, as well as commentary by the CEO or other company leaders.
If you're invested in a particular stock, reading its quarterly and year-end earnings reports is one of the smartest things you can do to make sure that your investment is still a good investment. If you aren't invested in a company, reading through its recent earnings reports can help you analyze profitability, growth, financial condition, and other important pieces of information that can help you make informed decisions about whether a company would be a good fit for your portfolio.
Understanding earnings reports
Understanding earnings reports
Earnings reports are (usually) quarterly releases that provide important details on how a company's business is operating, as well as updated financial statements. Publicly traded companies in the United States are generally required to issue earnings reports once per quarter to disclose and discuss their quarterly and full-year business results to the investing community.
Earnings reports must be issued in a timely manner after the end of the period being reported. Most (but not all) companies release their earnings reports within three to seven weeks after the end of the fiscal quarter. This period that occurs after each calendar quarter is often referred to as earnings season.
For example, in a company's earnings report, you can find information on its revenue (also known as top line) and earnings (bottom line), as well as how specific parts of the company performed. For example, in Amazon's quarterly earnings report, you can learn how the company's e-commerce business and Amazon Web Services (AWS) businesses each performed.
Retained Earnings
Most companies provide commentary from senior leadership on the results and also provide valuable context about future growth initiatives. Many provide forward projections, or guidance, which tells investors how management foresees the business performing in the coming quarter or for the full year.
Finally, you'll get an updated version of the three key financial statements companies are required to issue: the income statement, balance sheet, and cash flow statement. All three of these can provide valuable information for investors to use in their analysis of how a business is performing.
Upcoming critical earnings reports
Upcoming critical earnings reports in 2024
There are thousands of stocks that trade on the NYSE and Nasdaq exchanges in the United States and thousands more that trade on over-the-counter (OTC) markets and on international stock exchanges. So, it's not possible for us to discuss all of them. However, here's a list of some of the most closely followed companies when it comes to earnings reports and when investors can expect to hear from them next.
| Name (Ticker Symbol) | Market Cap |
Upcoming Earnings Date |
|---|---|---|
|
Amazon.com (NASDAQ:AMZN) |
$1.38 trillion | 10/25/2023 |
|
Tesla (NASDAQ:TSLA) |
$722 billion | 10/17/2023 |
| Microsoft (NASDAQ:MSFT) | $2.37 trillion | 10/23/2023 |
| Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) | $773 billion | 11/3/2023 |
| Nvidia (NASDAQ:NVDA) | $1.12 trillion | 11/23/2023 |
| C3.ai | $3.6 billion | 9/6/2023 (actual) |
| Alphabet (NASDAQ:GOOGL)(NASDAQ:GOOG) | $1.61 trillion | 10/23/2023 |
| Shopify (NYSE:SHOP) | $68.3 billion | 10/25/2023 |
| Block (NYSE:SQ) | $34.4 billion | 11/1/2023 |
| Meta Platforms (NASDAQ:META) | $735 billion | 10/24/2023 |
It's important to note that most companies don't announce their earnings release date until a few weeks before it happens. In many cases (including in the table above), earnings dates that are a month or more in the future are approximate and are based on the company's previous earnings release activity.
Recent important earnings reports
Recent important earnings reports
For the 10 stocks in the earnings calendar chart in the previous section, here's a rundown of how things went the last time they reported earnings:
1. Amazon.com
Amazon reported its second-quarter earnings on Aug. 3, 2023, and the results were generally strong. Earnings and revenue both surpassed analysts' expectations, and the company’s cost-cutting efforts resulted in excellent profit margin growth. In fact, the second quarter was Amazon’s first with double-digit revenue growth in more than a year. Looking to the third quarter, Amazon expects year-over-year revenue growth of 9% to 13%.
2. Tesla
In the second quarter of 2023, Tesla reported nearly $25 billion in revenue, its highest total ever, and adjusted earnings per share exceeded analysts' expectations. However, profit margins were a bit weaker than expected, and there's a lingering fear that automakers will generally lose pricing power on electric vehicles as more new models roll out. Investors were also hoping for a little more clarity on future products (like the Cybertruck) than they received.
3. Microsoft
In its fiscal fourth quarter of 2023 (ended June 30), Microsoft reported $56.2 billion in total revenue, which was above expectations. However, the company's forward guidance didn't quite meet expectations, and growth was under 10% for the past three consecutive quarters -- the first time that has happened since 2017. On the bottom line, earnings came in better than expected, with $20.1 billion in net profit.
4. Berkshire Hathaway
Berkshire Hathaway is one of the few companies that always reports earnings on Saturdays, as management wants the market to have time to digest it before trading opens on Monday. In the second quarter of 2023, Berkshire reported year-over-year growth in its operating businesses, as well as more than $147 billion of cash and short-term investments on its balance sheet. We learned that Berkshire was a net seller of stocks, unloading large amounts of Chevron (CVX 0.37%), Activision Blizzard (NASDAQ:ATVI), and McKesson (MCK 0.62%), just to name a few.
5. Nvidia
In the first quarter of its 2024 fiscal year, graphics chipmaker Nvidia reported both revenue and earnings that handily surpassed expectations. And perhaps more importantly, the company said it expected sales in the fiscal second quarter that were more than 50% higher than analysts had been expecting. Weakness in the company's gaming division was offset by strong sales in the data center and automotive segments of the business.
6. C3.ai
Artificial intelligence has been one of the most closely watched tech trends of 2023, and C3.ai is one of the most notable players in the space. In the fourth quarter of its 2023 fiscal year (ended on April 30), C3.ai reported revenue that was essentially flat year over year, although its forward guidance calls for a return to growth in the 2024 fiscal year. The company also reported $812 million in cash on its balance sheet and positive free cash flow, which gives the business financial flexibility while it grows.
7. Alphabet
In the second quarter of 2023, Alphabet (better known for its main business, Google) reported both earnings and revenue that exceeded analysts' expectations. Its fast-growing Google Cloud and YouTube advertising businesses both surpassed expectations individually. Google Cloud revenue grew by 28%. While Google's overall ad revenue growing by 3% might not sound too exciting, it's actually quite impressive, given the general slowdown in ad spending.
8. Shopify
E-commerce service platform Shopify beat expectations on both the top and bottom lines in the second quarter, and its 31% year-over-year revenue growth was particularly impressive. Gross merchandise volume from its customers soared by 17% from year-ago levels, and the company foresees gross margins rising significantly over the next few quarters.
9. Block
Despite fears of lower consumer spending, fintech giant Block (formerly Square) reported solid second-quarter results throughout its business. Gross profit increased by 27% year over year, including 37% growth from its Cash App business. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) more than doubled from year-ago levels, and gross payment volume (GPV) in the Square payment processing business is more than $215 billion on an annualized basis. The company's international business continues to grow, and Cash App now has over 54 million active users and $53 billion in quarterly peer-to-peer payment volume.
10. Meta Platforms
Meta Platforms, better known by its former name, Facebook, reported second-quarter 2023 earnings that not only beat expectations on both the top and bottom lines, but the company also issued third-quarter guidance that was significantly better than expected. Although Facebook is the largest social network in the world by a wide margin, it continues to grow, with over 3 billion monthly active users and impressive average revenue per user despite a difficult environment for advertising businesses.
Related investing topics
Why are earnings reports important?
Why are earnings reports important?
Earnings reports are important to investors because they provide lots of important insight into the current state of the companies you invest in, as well as clues about where those companies could be heading in the future. Among other things, earnings reports can help you spot growth trends, profit margin growth or contractions, balance sheet health, and how management foresees the business will perform going forward.
It's also important to note that earnings reports generally coincide with a conference call with the company's management team and analysts who cover it (also known as an earnings call). These can also be worth listening to, as the company's CEO, CFO, and other key executives can provide context and commentary about the numbers you read in their earnings report.
In a nutshell, with most U.S. companies, earnings reports are the most up-to-date look at a company's business and financials investors get, and reading the most recent earnings report is an important part of doing ongoing due diligence as a buy-and-hold investor and can help you find new investment opportunities as well.
FAQs
Earnings Reports FAQs
What time are earnings reports released?
There's no specific rule governing the timing of earnings reports, but most companies choose to release their results within a few hours before or after the stock market is open. Most earnings reports are released in the 6:00 a.m. ET to 8:30 a.m. ET or 4:00 p.m. ET to 5:00 p.m. ET windows, but there certainly are exceptions.
Where can I find earnings reports?
There are a few places where you can find earnings reports. The easiest place is typically on the company's investor relations page, but you can also look at the company's SEC filings. Alternatively, if you have a brokerage account, you can typically see all recent news (including earnings releases) in a company's news feed.
How much do earnings reports affect stock prices?
Earnings reports can certainly influence stock prices, but this isn't always the case. If a company misses expectations on earnings or revenue, reports an unexpectedly strong or weak quarter, or issues future guidance that is either worse or better than expected, its stock price could move sharply in one direction or the other. On the other hand, if a company's earnings report is completely lacking in surprises, it's entirely possible for a stock to barely budge after earnings.
