Investor's Corner: Earnings Season Calls For Cautious Moves

Much like a child bringing home a report card from school, a company's quarterly financial results show investors how it has preformed.

A company that weighs in with a hefty increase in earnings often will see its stock catapult higher -- particularly if those earnings are better than analysts expected.

On the flip side, investors also will punish companies whose earnings aren't up to snuff by sending their shares tumbling.

Regulators have restricted what information management can give to analysts. That has limited Wall Street's ability to get an early peek at earnings, and in many cases caused big profit surprises.

All that makes earnings season a risky time for stock investors. That's doesn't mean you shouldn't own stocks during earnings season. But it's important to be on guard when a stock you own is close to reporting results.

Also, if you've found a stock you're considering buying, check when it's due to report earnings. If that's set to occur in the next few days, you might want to considering waiting until after the earnings release.

The date of a company's earnings release is available from a variety of financial Web sites. The investor relations section of the firm's Web site often includes the date. The earnings date, or at least an approximation, is also listed in the Premium Graphs at investors.com.

In addition, many companies issue press releases announcing the date they'll post their results. Such releases often appear in Investors.com's Stock "Quotes and News Page" section.

Also take a look at Investors.com's E-Tables. In the footnotes column, the letter "k" indicates the company is slated to release earnings in the new few days.

Even the biggest stocks can see their share price plummet in the wake of an earnings disappointment. Earnings news also can bring a revised outlook from management, and that has the potential for trouble, too.

Consider Schlumberger (NYSE: - ). The provider of oil-field services was one of the market leaders since breaking out of a base in March.

On Friday, its shares plunged 11%, sliding below their 50-day moving average (point 1). Schlumberger beat earnings estimates. But the company warned its pricing on rigs and other equipment would continue to soften in the fourth quarter.