Dykstra: Reading the Earnings Tea Leaves

Other places to look for key indicators of business in the pipeline are bookings and signings, sometimes discussed on conference calls. This type of revenue may not be paid upfront. Bookings can be important enough in this economic climate to prompt an early press release by companies.

On Monday, tech company FEI(FEIC Quote) raised its bookings estimate 13% for the quarter ended last week, which pushed the stock up about 2% yesterday. But the effect is supposed to last. The company commented that the uptick in bookings illustrates the visibility FEI has into the performance it expects for the first half of 2009.

And each quarter, IBM(IBM Quote) reports its level of signings year over year in its services business in enough detail to give a good picture of which services will be up and which will be down.

As of September, signings of basic long-term jobs outsourcing were down 19%, while signings for higher-margin services and consulting business were up 14%. But because basic outsourcing is a bigger chunk of revenue, total services signings were down between 4% and 5% year over year.

So as divisional rounds and earnings season get under way, keep one eye on the balance sheet's deferred revenue line.

Lenny Dykstra manages Nails on the Numbers, a subscription service sold by TheStreet.com. Dykstra is 93-0 in his options picks. Click here for a free trial to Nails on the Numbers. Dykstra writes regularly about options trades for TheStreet.com.