When a company releases its results, it has to tell the London Stock Exchange first. Financial journalists will pick up the information from the LSE and file a report on the ones that are big or interesting enough - in the newspapers, in magazines and on websites.
For small companies, the report will be very short. In the 'Results in Brief' section of The Times on 18th July, for instance, it was reported that:
"The Range Cooker Company (domestic appliances) announced increased full-year results pre-tax profits to £2.83 million (£2.2 million). The total dividend is 1p (0.43p) with a final 0.75p."
Not much to go on there, except that profits and dividends per share have increased over the last year.
For larger companies, the newspaper or magazine may well print a separate commentary on the company's performance. These can be much more enlightening than the 'official' explanation of results provided by the company's directors.
"£12 billion, or 21%, was wiped off Nokia's value last Thursday. Investors scrambled for the exit after the Finnish telecoms group reported a set of good earnings rather than the exceptional figures that the market has come to expect. In today's environment, performances that are merely good are not good enough."
John Waples, 'Inside the City' column, Sunday Times 30.7.2000
The key point is that if a company's interim or final results are worse than the brokers consensus forecasts, the City may well 'punish' the company by marking down its share price. The City hates to be disappointed.
If, on the other hand, the results exceed expectations, you may find the share price rising as brokers revise their estimates and get more excited about the company than they were before.
A useful roundup of company results is provided in the weekly investor magazines. Investors Chronicle, for example, has a section which summarises the results of 15-20 companies every week, with 400-word commentaries, share price graphs, and a fact box showing the key data:
The editors then provide an 'IC View' of the shares and a buy/sell/hold recommendation.
Similar information is available on many financial websites, often with added historical data, and enhanced functionality - for instance the ability to draw up your own charts.
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