By Nina Trentmann
This Thursday is expected to be the most popular day to report financial results this earnings season. And, for some companies, that could be a good thing.
Deciding when to report financial performance increasingly involves a deliberate weighing of regulations, executive travel plans and the timing of competitors' reports, all in an effort to maximize -- or perhaps avoid -- attention from analysts and investors.
"Investors are paying close attention to when companies release earnings, " said Sandy Peters, the head of financial reporting policy at the CFA Institute. "That's something that CFOs and heads of investor relations should factor into their thought process."
On Thursday, more than 420 companies listed in the U.S. are expected to release earnings, which could be good or bad, depending on the company, according to Wall Street Horizon Inc., a data provider that tracks over 7,500 companies globally.
Reporting on a busy day can make it easier for companies to hide disappointing results amid a tsunami of information from other businesses. But a small company with good news to present might be overlooked by the volume of corporate behemoths reporting on the same day.
Attention paid toward companies' earnings -- measured by metrics such as downloads of regulatory filings, Google searches and news articles -- drops on popular reporting days, said Ed deHaan, an associate professor of accounting at the University of Washington's Foster School of Business.
Mr. deHaan and his colleagues analyzed the timing and impact of 120,000 results announcements in 2015 and found that trading volumes of individual stocks also went down on busy earnings days. Their findings were published in the Journal of Accounting and Economics.
"The ecosystem of investors and intermediaries is capacity-constrained, which results in a reduced response to earnings releases on busy days," Mr. deHaan said.
Most U.S. companies report on Tuesdays, Wednesdays and Thursdays, often in the third or fourth week after the start of the earnings season, said Wall Street Horizon Chief Executive Barry Star. Companies tend to avoid Fridays for fear their results release might draw less attention ahead of the weekend, he said.
"The myth is that companies that announce results on a Friday try to escape the wrath of the market," he said. "But evidence shows that this is not true." Market volatility can be stronger on a Friday because of the overall lower number of earnings releases, Mr. deHaan added.
Institutional traders consider earnings-release dates as "corporate body language" and might use that language to inform trades, according to Wall Street Horizon.
Competitors' timing matters, too. Software maker Citrix Systems Inc., for instance, usually reports on a Wednesday, after the market closes, alongside other companies in the sector, including technology heavyweight Microsoft Corp. Because of that, not all analysts covering the sector manage to dial into the company's earnings call, said Traci Tsuchiguchi, vice president for investor relations at Citrix.
The company is now reviewing whether it should permanently move its earnings date, following unsolicited feedback from analysts and investors after it changed its third-quarter earnings date to Thursday morning, Oct. 24 -- a day after Microsoft.
Citrix merged its earnings date with an analyst day, Ms. Tsuchiguchi said. "We were due for an update for our longer-term targets," she said. "If you can get it all out on the same day, you don't want to defer questions to a later analyst day."
Some parameters around companies' earnings releases are set by regulators. The U.S. Securities and Exchange Commission requires firms with $75 million or more in publicly traded shares to file quarterly results no more than 40 days after the end of a reporting period, and companies in Europe and Asia also need to abide by tight regulatory deadlines.
It is important for a company to adhere to its chosen date once it has made an official announcement, Mr. Star said. "If dates are moved and appearances are canceled, this sends a signal to the market," he said.
Hexo Corp., a Canadian cannabis company, delayed its earnings release to Oct. 28 from Oct. 24 after it borrowed money a day before its planned results day.
The company previously had withdrawn its outlook for fiscal year 2020 and reduced its revenue expectations to reflect slower than expected store openings, pricing pressure and a delay in government approval for certain cannabis products, according to a news release.
Hexo needed extra time to finalize its filings after the financing, the company said.
The company's share price initially rose after the news about the financing on Oct. 23 -- the day when Hexo announced it would move its earnings day -- but fell 5.7% a day later on Oct. 24 and another 6% the following day, underlining investor concerns about the company's outlook.
Closing at 2.86 Canadian dollars ($2.17) on the Toronto Stock Exchange on Wednesday, the company's share price has nearly halved in the past month, according to FactSet, a data provider.
"A CFO should know that all of their actions are being watched," said Wall Street Horizon's Mr. Star.
Write to Nina Trentmann at Nina.Trentmann@wsj.com