6) Earnings Forecast and Earnings Surprises

Earnings Forecast

Each company announces their earnings forecast for future years or future quarters. This is a good parameter to judge how the company is going to perform in future and whether it will earn a right amount of revenue or not. As an investor, you must hold share of the company whose earnings forecast shows increase in their revenues.

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Earnings Surprises

Quarter on Quarter companies declare their earnings forecast. Hence, it is the best time to analyze forecast vs the actual earnings, to know where does the company stand.  

If you see that the company’s actual earnings have surpassed the forecast, it is positive sign indicating that the company has over-performed its estimates.

On the other hand, if the company provides actual earning lower than the forecast, then it means it is under performing as per the expectation.

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