The stock investors look forward for the earnings season that comes every three months. This is the time when the investors look for their favourite stocks and notice how the fundamentals of the company support the market performance. This is also the time when the investors are also expected to reevaluate the interest in the companies and observe the expected price fluctuation. No matter what the earning results are, be it positive, negative or somewhere in between, the stock of the company is going to react.

When the investors are aware of the dynamics, they are ready for the earnings season and will also be able to identify the opportunities in the market. Investors need to know about the earning reports, why the earnings are important, why do the expectations of the market matter and whether the historical earnings performance can be used for future decisions. The earning reports work like the biography of the company and provide quarterly figures of how the company has performed. They are important as they show the profitability of the company and an idea about the overall financial stability.

The market expectations are measured mostly by the earnings-per-share estimates by the analysts that provide a tone on how the company is likely to perform. If the results vary from these expectations, then the price of the stock can go up or down. When the stock performance is on an upward trend, then the quarterly earnings are positive. While the investor at this point can think that the price could increase, but there are possibilities of fluctuations.

Finally the historical earnings performance can help the investors predict about the future market movements. It helps to provide reasonable parameters on the stock movements. The investors are provided with the baseline knowledge to judge about the future projections. When there is a significant drop in stocks, then it can indicate that a major event is about to happen or is happening.

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