How earnings affect stock price?
I believe the earnings report of the company do affect the fluctuations of stock for a short period. Human tend to act quickly to fresh news rather than profit/loss earnings. Fortunately, the stock market has had lots of experience traders who really give info and analyse the situation to help boost the market mood and belief in a company. The share price of $Sea(SE.US$ ( Shopee owner) didn't fall much after reporting the recent earnings, instead the price have risen consistently since then. I believe as long as the company can prove to the investors that they can attract the consumers to buy their service, it would be a win - win situation and the growth would be steady.
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Wilson_wu : Under what circumstances will the financial report be good and under what circumstances will it be bad？
7-boy OP : For me, when evaluating and investing a company, it is a need to look at the expenditure in details. If the expenditure rise due to the activities support sales and increase the appearance of the business, then I think it is for a good cause. If the company involve aggressively in acquisitions and real estate, then given to the uncertain of world economy and politic, it may be a death card. Having lots of assets and subsidiaries do not always translate into profit.
Spearhead : Couldn't agreed more