Earning Season – Ask The Professor: In this episode of Ask The Professor, Professor Milligan answers the question: What is earning season and why should you care?

“Earnings season” refers to the period of time during which a significant number of publicly traded companies release their quarterly financial reports. These reports include key financial performance figures such as revenue, net income, earnings per share (EPS), and guidance for future periods. Earnings seasons occur four times a year and are closely watched by investors, analysts, and other market participants because they provide a snapshot of corporate health and economic trends.

In the United States, earnings season typically starts one or two weeks after the last month of each quarter (i.e., April, July, October, and January). The season can last several weeks, with companies reporting in waves. Generally, it begins with major banks and financial institutions, followed by a variety of companies from different sectors. The information released can significantly impact stock prices, sector outlooks, and overall market sentiment.

Earnings reports are crucial for investors as they provide a foundation for making informed decisions regarding their investments. Companies that report earnings above expectations can see their stock prices rise, while those that fail to meet expectations may see their stock prices fall. Additionally, the forward-looking statements and guidance provided by company management during earnings calls offer insights into future performance and strategic direction, influencing investor expectations and market trends.

Overall, earnings season is a pivotal time for the stock market, as it brings a wealth of information that affects investment strategies, stock valuations, and perceptions of the economic landscape.

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