Investing 102

[billscamaros]

Earnings are announced every quarter, right? Are the earnings announced this week of greater significance than those announced throughout the rest of the year?

And the earnings that are announced this week set the tone for the dividends that are paid at the end of this quarter?

[GregWeld]

Earnings are every quarter -- but not all companies run on a calendar year... so really - there's an earnings report just about every day from "somebody"...

What earnings do is give you a peek into how things are going - in the company - and in the SECTOR as well.... You might own FORD stock - and pay attention to GM earnings... because they may say things that are indicative of how things are going overall for sales etc...

This is a broad based generalization of course - but if several big companies come out and report good sales and profits and have good things to say about going forward - then this can lift the market overall... and of course the reverse can happen.

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Dividends are set per quarter... and are indicative of how the company is doing. Doing really well and feel good about the future of their earnings they may choose to increase the dividend. That is a really good indicator because they are saying that their income is growing enough to support that payout.

COMPANIES are loathe to reduce the dividend....because it says "we're not doing so hot"...

It's really not much different than a persons personal situation.... nobody wants to be in a Ferrari and then have to trade down to a Yugo... and the reverse is true as well -- IF a person feels good about their future earnings - they're likely to buy a better car (pay a higher dividend).