Every quarter, companies will report their quarterly financial statement, and update their yearly guidance for the company. From this you can get a good idea of general profitability of the company. If you pay attention to the earnings call transcript, you can pick up more details, or colour, that provide more information on the company’s prospects. Of course, it is impossible to predict the direction of the stock on earnings report day, so what is necessary is to evaluate the stock wayyyy before that day to get an idea of its potential, and make your buy/sell decision including the information of the earnings report, rather than a reaction to it.
Funnily enough, my pick for the season will be ...