Key takeaways
- Results usually arrive first as a press release attached to an 8-K under Item 2.02.
- The full quarterly report, the 10-Q, follows within 40 or 45 days of the quarter's end.
- Compare each figure with the same quarter last year and with the previous quarter.
- Non-GAAP figures must be reconciled to GAAP figures; read both.
Every quarter, US public companies report how their business did. The numbers usually reach the market in two steps, and knowing which lines to read first saves a lot of time.
Where results come from
- The earnings release. A press release, filed with the SEC as an 8-K under Item 2.02 and usually attached as Exhibit 99.1. This is what moves the stock on results day.
- The 10-Q. The full quarterly report with financial statements and management's discussion. Large companies must file it within 40 days of the quarter's end, smaller ones within 45.
- The earnings call. Management usually explains the quarter and answers analysts' questions on a call the same day.
The lines to read first
- Revenue. Total sales for the quarter. Growth here shows whether demand is rising.
- Gross margin. Revenue minus the direct cost of what was sold, as a percentage of revenue. A falling margin can mean rising costs or price cuts.
- Operating income. Profit from the business before interest and taxes.
- Net income and diluted EPS. The bottom line, in total and per share. Diluted EPS counts all shares that could exist from options and convertibles.
- Cash flow. Profit on paper and cash in the bank can differ; operating cash flow shows the cash the business actually generated.
Compare, don't just read
A figure on its own says little. Compare it with the same quarter last year (year-over-year, which removes seasonal effects) and with the previous quarter (quarter-over-quarter, which shows the latest direction). On ALFA USA News, the "Results at a glance" table does this for you, using the numbers from the filing itself.
GAAP and non-GAAP
GAAP figures follow US accounting standards. Many companies also report adjusted, "non-GAAP" figures — for example excluding stock-based compensation or one-time costs. SEC rules require them to show the matching GAAP figure alongside and explain the difference. Read both: large or growing gaps between the two are worth understanding.
Guidance
Many companies give a forecast for the next quarter or year. Changes to guidance often matter more to the share price than the quarter just reported, because prices reflect what investors expect next.
Frequently asked questions
What is the difference between GAAP and non-GAAP earnings?
GAAP figures follow US accounting standards. Non-GAAP figures are the company's own adjusted measures, for example excluding stock-based compensation or one-time costs. SEC rules require companies to show the closest GAAP figure alongside and reconcile the two.
What is diluted EPS?
Net income per share, counting all shares that could exist if options, warrants and convertible securities were turned into stock. It is usually the EPS figure to compare.
Why can a stock fall after strong results?
Prices reflect what investors already expected. Results that beat last year but miss expectations, or a weak outlook (guidance) for the next quarter, can outweigh a good quarter.
This guide explains how filings and markets work in general. It is not investment advice.
