We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Imagine that, once every few months, you must release information detailing your current financial standing. The public can see where you’ve spent money, made money, or even how much you’ve saved.
Sounds intimidating, right?
That’s just a different way of describing what earnings season is.
The period is undoubtedly hectic for market participants, with companies finally revealing what’s transpired behind closed doors.
And on top of being hectic, it’s impossible to understate the importance of the period. For those wondering why it’s so critical, let’s look at three reasons that help explain its significance.
Critical Business Updates
Earnings reports provide market participants with a plethora of information, including revenues, expenses, and profits, just to provide a few simple examples. It’s critical for investors to receive this information, as it gives a deeper view into the business and allows them to see any potential red flags.
Meta Platforms (META - Free Report) posted adjusted EPS of $8.02 and record sales of $48.4 billion in its latest quarterly print, reflecting growth rates of 50% and 21%, respectively. Net income of $20.9 billion was the company’s highest read ever.
Below is a chart illustrating the company’s sales on a quarterly basis.
Image Source: Zacks Investment Research
Share Price Impact
A company’s quarterly earnings report commonly impacts its stock price, a theme market participants have undoubtedly noticed. Typically, we’ll see bullish share movement post-earnings from companies that surprise positively or raise their guidance, reflecting healthy business.
Philip Morris (PM - Free Report) shares benefited nicely from its latest set of better-than-expected results, with EPS growing 14% alongside a strong 7% move higher in sales. Demand has remained strong for the tobacco titan, with product innovations remaining key for its future.
The company has long been a favorite among income-focused investors thanks to years of consistently higher payouts.
Image Source: Zacks Investment Research
It’s worth noting that implementing a stop-loss at a comfortable threshold will help limit spooky post-earnings price swings, preserving precious capital.
Earnings Season Highlights Current Trends
Earnings season can also provide a big-picture view of overall trends within the economy or industries.
It also provides insight into current business trends within industries, allowing investors to position themselves appropriately. For example, NVIDIA (NVDA - Free Report) has posted robust Data Center results as of late thanks to the AI boom.
NVIDIA’s outlook continues to remain bullish, sporting a favorable Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
Bottom Line
While earnings season is undeniably hectic for everyone involved, that’s just the nature of the period.
It’s important for investors to understand why it matters for many reasons, including providing investors with an updated financial standing, the volatile price swings sometimes seen post-earnings, and the overall picture it provides on market and industry trends.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Earnings Season Matters
Imagine that, once every few months, you must release information detailing your current financial standing. The public can see where you’ve spent money, made money, or even how much you’ve saved.
Sounds intimidating, right?
That’s just a different way of describing what earnings season is.
The period is undoubtedly hectic for market participants, with companies finally revealing what’s transpired behind closed doors.
And on top of being hectic, it’s impossible to understate the importance of the period. For those wondering why it’s so critical, let’s look at three reasons that help explain its significance.
Critical Business Updates
Earnings reports provide market participants with a plethora of information, including revenues, expenses, and profits, just to provide a few simple examples. It’s critical for investors to receive this information, as it gives a deeper view into the business and allows them to see any potential red flags.
Meta Platforms (META - Free Report) posted adjusted EPS of $8.02 and record sales of $48.4 billion in its latest quarterly print, reflecting growth rates of 50% and 21%, respectively. Net income of $20.9 billion was the company’s highest read ever.
Below is a chart illustrating the company’s sales on a quarterly basis.
Image Source: Zacks Investment Research
Share Price Impact
A company’s quarterly earnings report commonly impacts its stock price, a theme market participants have undoubtedly noticed. Typically, we’ll see bullish share movement post-earnings from companies that surprise positively or raise their guidance, reflecting healthy business.
Philip Morris (PM - Free Report) shares benefited nicely from its latest set of better-than-expected results, with EPS growing 14% alongside a strong 7% move higher in sales. Demand has remained strong for the tobacco titan, with product innovations remaining key for its future.
The company has long been a favorite among income-focused investors thanks to years of consistently higher payouts.
Image Source: Zacks Investment Research
It’s worth noting that implementing a stop-loss at a comfortable threshold will help limit spooky post-earnings price swings, preserving precious capital.
Earnings Season Highlights Current Trends
Earnings season can also provide a big-picture view of overall trends within the economy or industries.
It also provides insight into current business trends within industries, allowing investors to position themselves appropriately. For example, NVIDIA (NVDA - Free Report) has posted robust Data Center results as of late thanks to the AI boom.
NVIDIA’s outlook continues to remain bullish, sporting a favorable Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
Bottom Line
While earnings season is undeniably hectic for everyone involved, that’s just the nature of the period.
It’s important for investors to understand why it matters for many reasons, including providing investors with an updated financial standing, the volatile price swings sometimes seen post-earnings, and the overall picture it provides on market and industry trends.