Ask Matt: Earnings expectations play key role

Paste BN markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com.

Q: How can I see how much a company is expected to earn in the future?

A: The cliché "expect nothing and you'll never be disappointed" doesn't apply to Wall Street. When it comes to short-term trading, expectations are everything.

The second a company releases quarterly profit, investors quickly size up the earnings and compare that with what Wall Street analysts were expecting. And more times than not, a stock soars if the actual results beat expectations and fall if they don't.

But where do investors get these earnings forecasts? Most professional investors use services such as Bloomberg, S&P Capital IQ and Thomson Reuters to obtain earnings and growth forecasts. These services have tools that professionals pay for to get the information parsed in different ways.

Individual investors, though, can still get high-level earnings forecasts online. There are several sources for earnings forecasts online. At Yahoo Finance, investors can enter a stock symbol and click the Look Up button. Clicking the Analyst Estimates option on the left side of the screen generates estimate information.

Investors can find a similar function at Reuters.com. Just enter the name or symbol of the company of interest and hit the enter key. Next, click on the Analysts tab and investors will find a rundown of all the estimates on that stock as well as its average analyst rating.