An official public statement of a company's profitability for a specific time period, typically a quarter or a year. An earnings announcement is typically made on a specific date during earnings season and is preceded by earnings estimates issued by equity analysts. When the company has been profitable leading up to the announcement, their share price will usually increase after the information is released.
Because the earnings announcement is the official statement of a company's profitability, the days leading up to the announcement are often filled with speculation. Analyst estimates can be notoriously off-the-mark, and can rapidly adjust up or down the days leading up to the announcement. This can attract the attention of investors who take the estimates at face value, artificially inflating the share price on speculative trading.
Investment dictionary. Academic. 2012.
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