Current:Home > MarketsBurton Wilde :I teach you how to quickly understand stock financial reports. -FinTechWorld
Burton Wilde :I teach you how to quickly understand stock financial reports.
View
Date:2025-04-14 16:54:07
U.S. stock earnings reports contain a wealth of information about corporate operations, but many newcomers to U.S. stocks find them difficult to understand due to the use of professional lingos. This article will introduce U.S. stock earnings reports from the perspective of explaining professional terms and focus on which data in the reports should be paid attention to. Burton-Wilder will teach everyone how to understand U.S. stock earnings reports.
Earnings Season: A year is divided into four quarters, and a large part of U.S. stock companies publish their earnings reports within a few weeks after the end of each quarter. The period when most companies release their earnings reports constitutes the earnings season, starting about a week and a half after the end of each quarter and continuing until the end of the month, with hundreds of companies reporting daily during peak periods.
Earnings Report: All publicly traded companies must publish an earnings report (also known as the 10Q form) every three months and file it with the Securities and Exchange Commission (SEC). The report must include the company's revenue, profit, expenses, and other financial details for that quarter, making them public for shareholders to understand the company's performance.
How to Understand U.S. Stock Earnings Reports:
Revenue, Sales or Top Line: The total income of a company in each quarter is an extremely important criterion. In judging the financial health of a company, revenue is often considered a more critical indicator than profit, especially for companies in the early stages of development or those not yet profitable.
Earning, Profits or Bottom Line: This is the data most shareholders and potential investors are concerned with, namely the amount of money the company made in the last quarter.
EPS (Earnings Per Share): EPS is often a reflection of a company's operational results. Users of this information, such as investors, use it to measure the profitability level of common stock and assess investment risks, evaluate corporate profitability, and predict growth potential, thus making related economic decisions. Financial media often report EPS data.
Estimates, Beat and Miss: Analysts employed by Wall Street companies make market expectations based on a company's revenue and EPS data, thereby pricing the stock. If the rating result beats the market's average expectation, the stock price will rise in the absence of other conditions; conversely, if it misses, the stock will lose value.
Guidance: Most companies release their performance estimates for the next quarter, or even the next year, in their quarterly reports. This is not mandatory data required by the report, but its impact on the stock is often greater than the actual earnings performance. For example, if a company's report shows revenue and profits better than expected, but the stock drops immediately after opening, it is likely due to lower-than-expected guidance. After all, the market is more interested in prospects, making the company's performance in the previous quarter seem less important.
Whisper Number: When there are many rumors that a company's performance is better or worse than expected, traders will make their own predictions about the company's profit situation. These predictions, which differ from the consensus numbers, are known as whisper numbers. Whisper numbers different from consensus expectations among traders often cause abnormal stock reactions to earnings reports.
Before the earnings release, companies will publicly or privately release "performance expectations" to analysts. However, to make even mediocre quarterly results appear "above expectations," these "performance expectations" are often set at very low levels. Investors understand this, so for them, whisper numbers are the real expectations, explaining why sometimes a company's performance is "above expectations" but the stock price still falls.
veryGood! (9317)
Related
- Intellectuals vs. The Internet
- Affirmative action in college admissions and why military academies were exempted by the Supreme Court
- Ice-fighting Bacteria Could Help California Crops Survive Frost
- Billie Eilish Cheekily Responds to Her Bikini Photo Showing Off Chest Tattoo
- Jamie Foxx reps say actor was hit in face by a glass at birthday dinner, needed stitches
- Pat Sajak Leaving Wheel of Fortune After 40 Years
- Hailey Bieber Supports Selena Gomez Amid Message on “Hateful” Comments
- In Alaska’s North, Covid-19 Has Not Stopped the Trump Administration’s Quest to Drill for Oil
- Selena Gomez's "Weird Uncles" Steve Martin and Martin Short React to Her Engagement
- Nick Jonas and Baby Girl Malti Are Lovebugs in New Father-Daughter Portrait
Ranking
- The Louvre will be renovated and the 'Mona Lisa' will have her own room
- Tribes Sue to Halt Trump Plan for Channeling Emergency Funds to Alaska Native Corporations
- New HIV case linked to vampire facials at New Mexico spa
- These $23 Men's Sweatpants Have 35,500+ 5-Star Amazon Reviews
- North Carolina trustees approve Bill Belichick’s deal ahead of introductory news conference
- Inside Chris Evans' Private Romance With Alba Baptista
- Casey DeSantis pitches voters on husband Ron DeSantis as the parents candidate
- Disaster by Disaster
Recommendation
Senate begins final push to expand Social Security benefits for millions of people
Spam call bounty hunter
What Would It Take to Turn Ohio’s Farms Carbon-Neutral?
There's a shortage of vets to treat farm animals. Pandemic pets are partly to blame
The 401(k) millionaires club keeps growing. We'll tell you how to join.
A Federal Court Delivers a Victory for Sioux Tribe, Another Blow for the Dakota Access Pipeline
From the Heart of Coal Country, Competing Visions for the Future of Energy
The Sounds That Trigger Trauma