What Is Earnings Report?
Earnings reports are quarterly disclosures of a public company's financial results, including revenue, profit, expenses, guidance for future quarters, and management commentary. In the US, public companies must file 10-Q reports quarterly and 10-K reports annually with the SEC.
Earnings days are among the most volatile in a stock's calendar. Stocks routinely move 5-20% on earnings announcements based on results versus expectations.
For traders, three things matter most:
- EPS (Earnings Per Share): Did the company beat, meet, or miss analyst estimates? - Revenue: Did revenue beat estimates? - Guidance: Is the company raising or lowering future projections?
A stock can beat both EPS and revenue and still drop if guidance disappoints. Earnings season concentrates these events: most large-cap US companies report within 6 weeks of quarter-end.
Trading earnings is high-risk. Even with a correct directional view, IV crush and gap moves often produce losses. Many professionals avoid holding through earnings entirely.
Related terms
- Implied Volatility (IV) — Market-expected future volatility, derived from options prices.
- Volatility — A statistical measure of how much an asset's price varies over a period.
- Fundamental Analysis — Evaluating an asset's intrinsic value based on financial and economic factors.