Current:Home > InvestBurton Wilde :I teach you how to quickly understand stock financial reports.-LoTradeCoin
Burton Wilde :I teach you how to quickly understand stock financial reports.
View Date:2024-12-23 23:28:02
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! (9)
Related
- A growing and aging population is forcing Texas counties to seek state EMS funding
- All the Surprising Rules Put in Place for the 2024 Olympics
- Democratic delegates cite new energy while rallying behind Kamala Harris for president
- Ethiopia mudslides death toll nears 230 as desperate search continues in southern Gofa region
- FSU football fires offensive, defensive coordinators, wide receivers coach
- Trump expected to turn his full focus on Harris at first rally since Biden’s exit from 2024 race
- 'DEI candidate.' What's behind the GOP attacks on Kamala Harris.
- Steve Bannon’s trial in border wall fundraising case set for December, after his ongoing prison term
- Georgia House Democrats shift toward new leaders after limited election gains
- What time does 'Big Brother' start? New airtimes released for Season 26; see episode schedule
Ranking
- Will Aaron Rodgers retire? Jets QB tells reporters he plans to play in 2025
- IOC President Bach says Israeli-Palestinian athletes 'living in peaceful coexistence'
- An Alaska veteran is finally getting his benefits — 78 years after the 103-year-old was discharged
- US banks to begin reporting Russian assets for eventual forfeiture under new law
- Mechanic dies after being 'trapped' under Amazon delivery van at Florida-based center
- The Daily Money: Kamala Harris and the economy
- Man pleads guilty to bribing a Minnesota juror with a bag of cash in COVID-19-related fraud case
- WNBA All-Star Game has record 3.44 million viewers, the league’s 3rd most watched event ever
Recommendation
-
Asian sesame salad sold in Wegmans supermarkets recalled over egg allergy warning
-
Chinese swimmers saga and other big doping questions entering 2024 Paris Olympics
-
Joe Burrow haircut at Bengals training camp prompts hilarious social media reaction
-
Fires threaten towns, close interstate in Pacific Northwest as heat wave continues
-
Pedro Pascal's Sister Lux Pascal Debuts Daring Slit on Red Carpet at Gladiator II Premiere
-
Heather Rae and Tarek El Moussa Speak Out on Christina Hall's Divorce From Josh Hall
-
Google’s corporate parent still prospering amid shift injecting more AI technology in search
-
Kamala Harris hits campaign trail in Wisconsin as likely presidential nominee, touts past as prosecutor