Earnings Announcement

An earnings announcement is a formal, public declaration of a company’s financial success for a given time frame, usually a quarter or a year. During earnings season, an earnings release takes place on a specified day and is followed by earnings projections provided by equity analysts. A company’s share price will often rise up to and slightly after the information is published if it has been profitable before the announcement. Earnings reports are frequently taken into account when forecasting the opening of the following day because they can have a significant impact on the market.

Regulations of the Securities and Exchange Commission stipulate that the information in the announcements must be accurate. The days preceding the earnings announcement are frequently packed with anticipation among investors because the earnings announcement is the formal statement of a company’s profitability.

In the days preceding the announcement, analyst estimates are infamous for being inaccurate and can quickly change up or down, artificially inflating the share price and impacting speculative trading.