Ask Matt: Why does earnings season matter?

Q: Why does earnings season matter?

A: Sports fans love football season. Entertainment lovers can't wait for Oscar season. But earnings season matters most to people who care about money and the corporate world.

Every three months companies that sold stock to the public must tell the world how they're doing financially. Regulations are strict about this. Investors often pay the most attention to how much profit companies hauled in during the quarter after paying expenses. Stocks can move violently up or down after profits are announced if investors are surprised by what they hear. If earnings are better than expected, the stock can soar. But if the earnings miss forecasts, watch out.

Earnings season is often much more just sizing up the company's bottom line during the quarter. Investors look for other key measures, such as the amount of business the company booked, which is called revenue. Some companies even tell you what they expect their business to look like in the future. This glimpse into future can be even more telling than past results.

You don't have to be a Wall Street maven to care about earnings. Investors looking for good investments, employees curious how safe their jobs are, job seekers, managers and even competitors can use earnings season to see how companies are doing. Earnings season is one of the rare times companies have to fess up and tell you how things are really going.

USA TODAY markets reporter Matt Krantz answers a different reader question twice a week. To submit a question, e-mail Matt at mkrantz@usatoday.com or on Twitter @mattkrantz.