Fiscal Quarter (Q1, Q2, Q3, Q4)
What Is a Fiscal Quarter?
A fiscal quarter is a consecutive three-month period within a company’s fiscal year. These calendar divisions are used by publicly-traded companies to schedule the release of financial reports and the payment of stock dividends.
Do Private Companies Release Quarterly Reports?
Many privately-held corporations also adhere to the fiscal year calendar and compile financial results on a quarterly basis. Private companies are not, however, required to release quarterly reports and this data is typically not required to be made public.
Calendar Quarter vs. Fiscal Quarter
Calendar quarters correspond to the standard calendar year, meaning that the first quarter always begins with January 1st and the fourth quarter ends with December 31st. Fiscal quarters coincide with a company’s fiscal year (which doesn’t always align with the calendar year).
When Are Fiscal Quarter Dates?
The following fiscal quarter periods apply for companies whose fiscal year align with a regular calendar year:
2019 Fiscal Quarter Dates
Q1 2019: January 1 - March 31
Q2 2019: April 1 - June 30
Q3 2019: July 1 - September 30
Q4 2019: October 1 - December 31
2020 Fiscal Quarter Dates
Q1 2020: January 1 - March 31
Q2 2020: April 1 - June 30
Q3 2020: July 1 - September 30
Q4 2020: October 1 - December 31
2021 Fiscal Quarter Dates
Q1 2021: January 1 - March 31
Q2 2021: April 1 - June 30
Q3 2021: July 1 - September 30
Q4 2021: October 1 - December 31
Non-Standard Fiscal Quarters
Companies whose fiscal years do not align with regular calendar years are said to have non-standard fiscal quarters. In this case, their quarters would not follow the traditional fiscal quarter dates seen above.
This is common for companies with highly seasonal revenue streams such as the retail industry, where over half of their net revenue may be generated in Q4.
Non-Standard Fiscal Quarter Example
Apple’s fiscal quarters cover the following months:
Q1: October, November, December
Q2: January, February, March
Q3: April, May, June
Q4: July, August, September
Why Are Fiscal Quarters Important?
Publicly-traded companies issue quarterly reports at the end of each quarter. These reports contain a set of financial statements that outline their financial information for that period. They allow companies to track performance and make comparisons, but are also used for tax purposes.
In the United States, corporate quarterly reports (also called 10-Q reports) are filed through the Securities and Exchange Commission (SEC).
Where Can I Find Quarterly Reports?
Quarterly reports are often found on company websites or financial publications, but the most reliable source is the SEC's EDGAR system.
Pros and Cons of Quarters and Quarterly Reports
In the United States, the model of publishing financial reports every three months has been in place since the 1930s. But like many concepts in finance, there are many pros and cons of quarterly reports:
Pros of Quarters and Quarterly Reports
Transparency
Quarterly reports give the public a look into the financials and performance of a company, providing valuable data on its financial well being.
Accountability
Since companies’ financial reports are made public and filed through the SEC, companies are held accountable for their performance and reporting. These reports also provide an incentive for companies to maximize performance in order to achieve self-imposed targets.
Valuation
Quarterly reports assist in creating market valuations of companies that can help attract capital.
Analysis
The data presented in quarterly reports allows companies to track performance, identify trends, and make important decisions about the future.
Comparison
Quarterly reports allow companies to compare their financials from previous periods or even with other companies in the same industry.
Dividends
Breaking the fiscal year into quarters allows companies to pay quarterly dividends, which can provide a steady stream of cash for shareholders.
Consistency
Since companies may operate on different calendars, quarters and quarterly reports provide consistency when making comparisons or tracking performance.
Cons of Quarters and Quarterly Reports
Projections
Companies often include forward-looking statements that project results they have yet to deliver. Investors who act on this information may be disappointed the next quarter. This could lead to investors selling stock, adding to overall market volatility.
Short-term
Vocal critics of quarterly reporting have included investor Warren Buffett and bank CEO Jamie Dimon. Their primary complaint is that instead of focusing on long-term growth (which is in the better interest of shareholders), strict adherence to quarterly results puts unnecessary pressure on short-term results.
Pressure
Analysts and investors rely on quarterly reports, so companies may be pressured to manage their numbers to meet their expectations.
Costly
It costs time and money to create financial reports, especially when they are required four times per year. This limitation could also deter private companies from going public.
No context
While quarterly reporting provides the public with more data and transparency,
it only offers an overview for a very limited period. Without additional context, investors may be discouraged to invest if they see undesirable results or less profitable quarters.
Ask an Expert
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How Many Quarters Are in a Year?
There are four quarters in a year, each three months in length.
What Is Q1 2020?
Q1 2020 began on January 1st, 2020 and ended on March 31st, 2020.
Are Quarterly Reports Audited?
Quarterly reports are not required by law to be audited, but audits can increase investor confidence as they promote transparency and security.
When Are Quarterly Reports Released?
Companies usually release their quarterly reports within a few weeks of the end of the previous quarter.
Key Terms Associated with Fiscal Quarters
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