Making The Most Of The Final Earnings Season Of The Year

We are now entering the final earnings season of the year. Over the next few weeks, thousands of firms will provide financial statements indicating how they performed over the previous quarter. Investors should pay close attention to these announcements — and management’s associated discussions around them — as they build and monitor their portfolios.

Of particular interest within these statements is the earnings per share (EPS) metric that reveals how much the firm made in accounting profit on a per-share basis in the preceding quarter. If a firm’s announced EPS differs significantly from market analysts’ projections or if management provides unexpected news about the firm’s future, the stock price can swing substantially.