Help! I Don’t Know Which Fiscal Quarter I’m In.

A blog about business and economics.
July 23 2014 5:52 PM

Which Quarter Is It, Anyway?

Par7374806
Even a fancy watch can't help you track fiscal calendars.

Photo by Fabrice Coffrini/AFP/Getty Images

As is usual for late July, summer earnings season is in full swing. But for which quarter? Well, Facebook trounced second-quarter expectations this afternoon with revenue that increased 61 percent. On Tuesday, Apple announced its third-quarter results and Microsoft reported results for its fourth quarter. Third-quarter figures are expected from Starbucks and Visa on Thursday, along with second-quarter numbers for various U.S. airlines. Needless to say, there isn't much of a consensus.

Why can't companies agree on which quarter it is? For starters, because no one is telling them what dates to use. "Companies get to choose their year-end," Harvard Business School professor V.G. Narayanan explained via email. Their selections are often industry-specific. "Retailers typically pick January" as their end-of-year, Narayanan said. "That way, they include the Christmas sales and also the post-Christmas returns, payment of bills to suppliers, etc. It's probably the time of the year when they have the most cash on their hands." Other companies run on fiscal calendars that he describes as "historical accidents," such as a firm that started in one industry but migrated to another without tweaking its fiscal year accordingly.

Advertisement

Brandon Hurst, an analyst at investment research firm Morningstar, said companies like to schedule their fiscal year so that they can report their strongest quarterly results during the fourth fiscal quarter. Tying a neat bow on the last earnings report of the fiscal year sends positive signals to investors and can provide a boost to stock prices, Hurst explains. So while retailers generally opt to end their years right after the winter holidays, travel and leisure companies might choose to close out in the spring or fall to reflect peak travel seasons.

Tax considerations come into the mix as well, but across industries, the main goal is to pick dates that are strategically best for the company. So long as that means different things for different firms and industries, we'll probably be resigned to discussing earnings with a sort of Einsteinian relativity.

Alison Griswold is a Slate staff writer covering business and economics.

 

TODAY IN SLATE

Jurisprudence

Scalia’s Liberal Streak

The conservative justice’s most brilliant—and surprisingly progressive—moments on the bench.

Colorado Is Ground Zero for the Fight Over Female Voters

There’s a Way to Keep Ex-Cons Out of Prison That Pays for Itself. Why Don’t More States Use It?

The NFL Explains How It Sees “the Role of the Female”

The Music Industry Is Ignoring Some of the Best Black Women Singing R&B

Culturebox

Theo’s Joint and Vanessa’s Whiskey

No sitcom did the “Very Special Episode” as well as The Cosby Show.

Television

The Other Huxtable Effect

Thirty years ago, The Cosby Show gave us one of TV’s great feminists.

Cliff Huxtable Explains the World: Five Lessons From TV’s Greatest Dad

Why Television Needs a New Cosby Show Right Now

  News & Politics
Weigel
Sept. 18 2014 8:20 PM A Clever Attempt at Explaining Away a Vote Against the Farm Bill
  Business
Moneybox
Sept. 18 2014 6:02 PM A Chinese Company Just Announced the Biggest IPO in U.S. History
  Life
The Slate Quiz
Sept. 18 2014 11:44 PM Play the Slate News Quiz With Jeopardy! superchampion Ken Jennings.
  Double X
Doublex
Sept. 18 2014 8:07 PM Crying Rape False rape accusations exist, and they are a serious problem.
  Slate Plus
Behind the Scenes
Sept. 18 2014 1:23 PM “It’s Not Every Day That You Can Beat the World Champion” An exclusive interview with chess grandmaster Fabiano Caruana.
  Arts
Brow Beat
Sept. 18 2014 4:33 PM The Top 5 Dadsplaining Moments From The Cosby Show
  Technology
Future Tense
Sept. 18 2014 6:48 PM By 2100 the World's Population Could Be 11 Billion
  Health & Science
Science
Sept. 18 2014 3:35 PM Do People Still Die of Rabies? And how do you know if an animal is rabid?
  Sports
Sports Nut
Sept. 18 2014 11:42 AM Grandmaster Clash One of the most amazing feats in chess history just happened, and no one noticed.