October is here and this signals a huge time for all of the publicly traded companies. It means it is time for the Q3 reports to be released. Major companies such as Amazon, Microsoft, and Yahoo! are all preparing their Q3 reports and have them set to release in the next few weeks to share what their performance for the third quarter has looked like.
Sometimes these quarterly reports can have a huge impact on the trading of the company, as well as the investors in the company. These reports can often create a lot of movement in the market itself that can dramatically affect the index and stock prices of the company. To truly understand how these third quarter reports can impact the market and trading world, take a look at the information below.
What does a Quarter Consist Of?
To understand these reports, you must first take time to understand what the quarter means. There are four quarters in a year, each consisting of three months. They are set up as follows: Q1 is January, February, March. Q2 consists of April, May and June. Q3 follows with July, August and September. Q4 closes out the year with October, November, and December. While all companies follow the format of three months per quarter, their quarter may start in October instead of January.
When you see a report, you often see the headings such as Q1 2015 which indicates it is the first quarter of the year 2015. Learning how these quarters are reported and what they can mean to you as investors helps you monitor trends of the company and know when trading is beneficial to you.
What does a Quarter Report Consist of?
Basically, the quarterly report is a “report card” for the company. It consists of the earnings for the time period that includes everything from net sales to the income of each share in the company. This information is used to evaluate how well a company is doing throughout the course of the year. It shows patterns and trends that can be measured over time such as what products are doing well or what time periods the business seems to slow down. The numbers in these reports can have an impact on the way investors work with the company or what steps should be taken for the next quarter to improve business.
When you’re considering trading your stock in the company or selling it, you can use these reports to gage the business patterns and see what is more beneficial for you and your investment.
Why Are These Reports Necessary?
Any publicly traded company must report their income and earnings over each quarter to the SEC. This is the Securities Exchange Commission and their job is to help protect the investors in companies. In other words, there is a group of five individuals chosen by the President to oversee the public companies and their earnings. These commissioners are in place for protection of those invested in the companies and to protect from fraudulent takeovers or manipulation from happening.
How Can These Reports Help With Trading?
Each quarterly report can have an impact on the public trading of a company. It can actually help make or break those investments depending on how the company is doing. These reports share patterns and trends of what is going on in the current business. The report also can tell you if a company is progressively increasing in their profits or if they are starting to show a decline. Evaluating the reports allow you to see what is working in the company and what could be detrimental to the business.
The third quarter reports can have a huge impact on the sell of the company shares depending on the results. For example, companies such as movie theaters, tourist locations, and even ice cream shops do most of their business during the summer seasons. Their third quarter reports can show a huge growth and entice investors to join in their companies. Other companies such as retail, will show larger growths during their fourth quarter earnings as the holiday season brings on the shoppers.
The third quarter seems to encourage a movement in the trading and selling of stocks. If the company is doing well for the past three quarters, it encourages others to invest. When the company is showing a decline in growth and sales, it can cause a huge movement out of the company. The Q3 report is very important to both the business itself, and keeping the investors happy.
If you’re considering getting into the stock market or you’re already there, these third quarter reports are very important to watch. This is the time of year that can make or break some markets and you should keep your eye out. You may start to see some movement soon after these reports are released to the public. Take sometime to study the reports from your investments to see if your profits are what they should be. It may be time to discuss movement with your broker or consider other options once you see the earnings.