What is a Quarterly Report?
A quarterly report, also referred to as a quarterly earnings report, is a set of financial statements containing information related to its performance. The report is intended for shareholders who own stock in the company.
Publicly traded companies are required by law to file quarterly reports through the Securities and Exchange Commission (SEC) using Form 10-Q.
When do Companies Report their Quarterly Earnings?
Quarterly reports are released four times per calendar year, once per quarter, or every three months. Companies sometimes set their own financial calendar, but typically quarters run:
|Quarter 1 (Q1)||January, February, and March|
|Quarter 2 (Q2)||April, May, and June|
|Quarter 3 (Q3)||July, August, and September|
|Quarter 4 (Q4)||October, November, and December|
Following the end of a fiscal quarter, companies are required to file reports with the SEC within 40 to 45 days.
What's Included in a Quarterly Report?
Quarterly reports vary between companies but typically include:
- Income statements
- Balance sheets
- Cash flow statements (quarterly and year-to-date)
- Market risk disclosures
- Analysis and recommendations from company management
These reports may also contain a discussion of any matters put to a vote by shareholders during the quarter and any other pertinent information related to the company.
How to Read a Quarterly Report
Quarterly reports present a summary of a company's performance, but not a detailed analysis of every aspect of the business. They serve as a guide to shareholders and provide transparency and a level playing field for outside investors.
You can read the summaries to gain knowledge on performance during the quarter (or year-to-date) compared to the previous year. There's also the more detailed statements if you want to find specific information about company performance during the last quarter.
What to Look for in a Quarterly Report
It's a good idea for investors to read and analyze a company's quarterly reports. The specific information you should take note of include:
Using the information listed above, investors can accurately assess a company's performance, which may help them gauge future performance.
Example of a Quarterly Report
The Amazon quarterly report for Q4 2020 is an excellent example of the type of information included in these reports, including an announcement of a significant change in its company leadership.
The report contains an overview of company growth in 2020 compared to 2019. It also includes specific financial information from Q4 and 2020 YTD.
Its quarterly report also summarizes other company initiatives, including initiatives in charity work, strategic partnerships, environmental work, technological advancements, employee initiatives, and more.
The quarterly report is rounded out by guidance for investors for the first quarter of 2021 and all of the necessary financial documents. This particular quarterly report was of great significance because it also announced that Amazon Founder and CEO Jeff Bezos was transitioning into a new role as Executive Chair and that Andy Jassy would become the new CEO of Amazon.