Earnings reports contain crucial financial and nonfinancial data about the company, which give shareholders and any interested parties vital information about the health of the company, its future prospects and governance. 

An earnings report is filed using the Form 10 K of the Securities and Exchange Commission (SEC). 

Companies may release earnings reports quarterly, semiannually, or consolidated reports annually. 

We will discuss the most important data included in earnings reports in the section below. 

Financial Reports

Financial reports include the accounting of the company and its financial results during the relevant period, with documents such as:

• Income Statement (Profit and Loss Statement): This section details the company's revenues, expenses, and net income for the quarter. It typically includes information on sales revenue, cost of goods sold (COGS), gross profit, operating expenses, interest expenses, taxes, and net income
• Balance Sheet: The balance sheet provides an overview of the company's financial position at the end of the quarter. It includes assets (such as cash, inventory, and property), liabilities (like debt and accounts payable), and shareholders' equity
• Cash Flow Statement: This statement shows how cash is flowing in and out of the company during the quarter. It is divided into operating, investing, and financing activities and provides insights into a company's liquidity

The reports also include a wide range of interesting factoids, tables, and charts to compare the company’s current performance to its historical developments.

For example, a manufacturing company may show charts of their annual production output and the cost per unit of their products to highlight some important strengths and weaknesses in its operations. 

Management Discussion & Earnings Call Transcript

Typically, an earnings report is accompanied by an earnings call transcript, which is an official call made by the CEO or chairman of the board where they answer questions from some of their largest shareholders and discuss the future plans of the company, as well as the past performance and the reasoning behind it. 

Management discussions can take the form of a panel discussion done via a video call, where some key executives of the company discuss the various directions of the company’s business, as well as the challenges and opportunities available on the market for the company. 

Guidance & Final Notes

The ending of the earnings reports typically includes a guidance going forward, where the company lays out its future plans and estimates the impact of those plans on its bottom line. This section is meant to win the favor of the reader and assure them of the long-term prospects of the company. 

As a few final notes, the CEO might include a letter outlining the core values and commitments of the company, as well as any activities that are not related to the company’s core business, such as ESG spending, charitable donations, etc. 

As for the practical application of the data provided in earnings reports, stock traders can anticipate major changes in the price of the stock based on the date of their quarterly earnings release, which can either show overperformance or underperformance with relation to analysts’ expectations. 

Analysts provide a constant stream of updates surrounding the company, as well as the industry it operates in to help traders and investors understand where it might be headed and the potential headwinds/opportunities facing the company in the near-term future. 

For example, we can look at Tesla’s Q2 2023 earnings report and its income statement that clearly shows the company’s bottom line from continuing operations. 

The data also shows the company’s earnings per share (EPS), which is a vital metric used by analysts to determine whether the company overperformed or underperformed. 

• An earnings report is a document released periodically that depicts the financial and operating performance of a publicly traded company
• An earnings report includes the balance sheet, income statement, and the statement of cash flows, among other filings 
• Companies also include governance and managerial updates in earnings reports, while also providing various factoids and charts to describe operations 
• An earnings report form filed with the SEC is the Form 10 K