What Tha Finance?!: Earnings x EPS

Over the last couple of months, the conversations about how companies are performing have become high-key the new gossip like we gather from gossip blog on IG. Why? Currently the pulse of the recession is tied to know how companies are performing. Especially now with us tango dancing with Rona Mae (Covid) from health to wealth. The switch up is hella real. One of the ways to know how companies are performing is through this ting called ‘Earnings’. or Quarterly Earnings. This report is one of the things that’s critical for investors to know about companies before and during holding them.

During this new edition of What Tha Finance (WTF), we tap into what this is and how does this not only impacts companies but also investors like you. First up, it’s not really a season like Spring or Fall. Well depending on what some companies perform, it could feel like Winter. 

When Do They Happen?

Here’s a quick break down of when earning seasons done:

•  First quarter ends March 31. Earnings for First quarter begins in Mid-April and ends in mid-May

•  Second quarter ends June 30. Earnings Mid-July and ends Mid-August

•  Third quarter ends September 30. Earnings begins in Mid-October and ends Mid-November

•  Fourth quarter ends December 31. Earnings begins in Mid-January and ends Mid-February


What Is IT?!

To snatch it up - Earnings is simply  the net benefits of a corporation's operations along with corporate tax is due for that fund/company. Pretty much - income and profit. Dassit. You to know if the company has been cap (not doing well) or cash (performing solid) in the previous quarter.

You might find some other terms used like - EBIT or Earnings Before Interest and Taxes (profit) along with EBITDA or Earnings Before Interest, Taxes, Depreciation, and Amortization (taxes) when you hear analysis about the companies in your portfolio or watch list.

But on an Instagram post, I gave some context to what EPS or Earnings Per Share looks like for investors: 

*Psst- this can also be called Net Income Per Share. 

The EPS is just a piece of how the value of stock is determined, but not the only factor. This can change by the season of the fund/company. The key for companies when reciting their Resurrection Day Speech is to show that they did get as close to EPS that they were targeting. 

Here’s what you can expect with Earnings Szn:

Want to keep track on when Earnings are being shared? One of my favorite resources Yahoo Finance keeps it together for you (here)!

Additional Points + Close

To some, there could be a bit of confusion with revenue. The difference between the two is that revenue tracks the total amount of money made in sales while earnings reflect the portion of the revenue the company keeps in profit after expenses are paid. You know how it is when you get a paycheck and pay out expenses (bills and tings)  while hoping that you have something left over?! Apply here. 

Another thing that Earnings do for the economy is keeping a screenshot of how consumers (you and I) financial health is looking. Due to the current situation of stimulus packages, corporate bailouts and a pandemic, the next couple of earnings will be one that is watched even more closely than usual. 

Even if you don’t own a specific fund/company, you can use upcoming earnings seasons to help gauge whether you should snatch or skip that specific company before grabbing it. 

While I share weekly about what earnings are up for the week ahead with Portfolio Pulse, here is a link to the earnings calendar.

This allow connects back to the forecast that the company set the year before. Knowing if they miss, beat or met what they expected. This is all housed upon a SEC Form 10-Q. Think of report card for companies, but for their financial statement.

I consistently tell investors to stay on the pulse of what’s going on with their holdings. They can be the benchmark to how your portfolio and paper is doing. I mean - you’re the owner, right?!

Want to learn more money terms? Click this link to read the rest of the What Tha Finance entries thus far! 

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