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What It Is:

Earnings season refers to the four times per year when most public companies announce their quarterly and/or annual earnings.

How It Works/Example:

Although there are no official dates, earnings seasons usually last about a month and start in mid-January (after the fourth quarter ends in December), mid-April (after the first quarter ends in March), mid-July (after the second quarter ends in June), and mid-October (after the third quarter ends in September). It is important to note that not every company ends its quarters and announces earnings in this traditional pattern, but most do.

During these times, many companies are announcing their earnings via press releases and filings with the Securities and Exchange Commission (SEC). Usually, a company will issue a press release first (which contains key but minimal information), and then make a more detailed filing with the SEC (typically a Form 10-Q or 10-K and possibly additional forms). These disclosures not only report a company's earnings per share, they provide financial statements and some comment or discussion from management.

Why It Matters:

Earnings season can be a time of heightened volatility and trading volume in the markets as investors react to the onslaught of news and new information about companies. Much of this reaction centers on the difference between what companies were expected to report and what they actually reported.

Often, short-term investors are more affected by the volatility of earnings season than long-term investors. However, all investors are responsible for keeping up-to-date on their investments and following the earnings performance of their companies.