Listed companies periodically publish data on the performance of their business activities, particularly to share them with shareholders and market participants. The period of publication is known as the “earnings season” in the USA, where it is mandatory to report earnings four times a year. In Italy, this concept is succinctly defined as quarterly earnings season, and it is a crucial moment for traders as stocks related to companies presenting data become volatile, both negatively and positively, requiring investors to adjust their trading strategies based on the quarterly results released.
The goal is to tell the market, and therefore shareholders, exactly how that company listed on the stock exchange is performing. It is essentially a quarterly snapshot that clarifies where the company is heading in terms of projects.
Earnings seasons also provide an important opportunity for comparing the current results with previous ones of the same company or between different companies. Quarterly variations can also indicate broader market or sector trends.
The general date ranges for each quarter (note that there are companies that may have a different schedule) are as follows:
- First quarter (ends March 30): April 15 to May 31
- Second quarter (ends June 30): July 15 to August 31
- Third quarter (ends September 30): October 15 to November 30
- Fourth quarter (ends December 31): January 15 to February 28The most important data
The stock market moves based on expectations regarding the future performance of macroeconomic and company data. This is why meetings between management and the financial analyst community are so important. It is a moment of discussion about future business prospects followed by the presentation of data related to the just concluded quarter.The main data that are considered and on which predictions and expectations are made by analysts are:
- Sales volume, the total of all invoices issued during the reference period for sales in the domestic and foreign markets.
- Earnings per share (EPS), the portion of a company’s net income allocated to each of the ordinary shares outstanding.
- Net income, a company’s total earnings calculated by subtracting operating expenses such as depreciation, interest, taxes, and other expenses from revenues.
- New opportunities and/or agreements with business partners.
First quarter 2024: some concrete cases
Palantir Technologies
Palantir Technologies (PLTR) reported better-than-expected earnings and revenues for the first quarter thanks to the strength of its commercial segment. However, shares fell more than 6% in after-hours trading on Monday, May 6, as the artificial intelligence software producer’s forecasts did not impress investors who were expecting more.
The company’s revenue for the first quarter of 2024 was $634.34 million, up 21% from the same period the previous year and above analysts’ expectations. Net income of $105.53 million increased by 17% from the previous year’s quarter, while diluted earnings per share (EPS) were 4 cents, up from 1 cent in the previous year. Both earnings metrics exceeded analysts’ estimates, according to Visible Alpha’s estimates.
Palantir reported that its commercial revenue grew 27% year-over-year, reaching $299 million, above analysts’ estimates ($290.4 million). Government revenue, which accounts for the majority of the software company’s sales, was $335 million, an increase of 16% year-over-year, with the US government representing about 77% of total government revenue.
The company also slightly raised its revenue forecast for the full year, ranging from $2.68 billion to $2.69 billion, compared to the previous $2.65 billion to $2.67 billion.
Qualcomm
Qualcomm (QCOM) shares rose on Wednesday, May 1, after the mobile chip giant reported solid earnings and a better-than-expected outlook for the current quarter, following increasing demand for smartphones with artificial intelligence.
The company expects sales in the June quarter to range between $8.8 billion and $9.6 billion, with the midpoint of the guidance at $9.2 billion, above the consensus of $9.05 billion.
It forecasts an earnings per share (EPS) for the period between $2.15 and $2.35, surpassing Wall Street’s forecast of $2.17 per share. For the fiscal second quarter, which ended on March 24, the San Diego-based company reported adjusted earnings of $2.44 per share, above analysts’ estimates of $2.32 per share.
Revenue in the quarter of $9.39 billion increased by 1% from the corresponding quarter of the previous year and exceeded Wall Street’s expectations of $9.34 billion. Qualcomm shares rose 9.6% on Thursday morning (May 2), bringing the stock’s performance year-to-date to 24%.
