Booyah Breakdown: After Hours on the Street

Timing is everything in life. You have to find just the right moment to tell your boss you're quitting. You have to create that picture-perfect moment to propose to your girlfriend (or boyfriend). And make sure you have a cold beer ready when you let your spouse know you've wrecked the car.

Same should hold true for earnings announcements. Yet there seems to be inconsistencies.

Take Thursday, Feb. 1, 2007. Before the market opened, Exxon Mobil (XOM Quote) reported a 4.3% drop in fourth-quarter net income amid lower energy prices. This was despite the fact that the company had taken in the largest annual profit in U.S. history. Then around 10 in the morning, agriculture giant Archer-Daniels-Midland (ADM Quote) reported that second-quarter earnings rose 20% as higher ethanol, starch and sweetener selling prices were partially offset by an increase in corn costs.

And finally, YRC Worldwide (YRCW Quote) reported after hours that its fourth-quarter profit fell 40%, due mostly to weak freight demand during that period.

So is there a reason behind when companies report earnings? Is it coincidental that Exxon and ADM chose to share their good news early in the day, while YRC waited until the markets closed to give their bad news?

Many of you have asked about the psychology behind the timing of earnings announcements and why some companies report during the day and others wait till after hours. Believe it or not, there is some method to the madness involved with when a company reports earnings, and the Booyah Breakdown is going to run through that rationale today.