Corporate earnings are the profits that a publicly traded company makes, and in turn, provide an important measure of overall economic health. Earnings are calculated as a company’s revenues minus its expenses, and companies can either reinvest those profits into operations or distribute them to shareholders in the form of dividends or share buybacks.

Corporate profits are closely watched because they can be a powerful force in shaping market sentiment, driving investor expectations and providing financial guidance. A strong showing can propel stock prices higher, and a poor one can cause them to plummet.

A company’s earnings report will disclose a variety of critical metrics, including earnings per share (EPS), revenue, and net income. These reports also often include commentary and guidance from company leadership. The EPS figure is important because it divides a company’s profits by its outstanding shares. It can be helpful in comparing companies within the same industry, or between periods.

Investors can also listen in on an earnings call, where management will discuss top-line results with analysts and investors. This can be done online or via phone, and it provides a valuable glimpse into how a company is performing. However, listening to earnings calls can be a risky endeavor, as the market’s reaction to the news can be unpredictable. As such, traders should always take into account other factors when trading based on earnings reports or guidance. This includes doing deep research and spreading investments across different sectors and companies.