Quarterly Revenue Growth

What Is Quarterly Revenue Growth?

Quarterly revenue growth is an increase in a company's sales in a single quarter compared to sales of an alternate quarter. The current quarter's sales figure can measure up on a year-over-year basis (e.g., 3Q sales of Year 1 compared with 3Q sales of Year 2) or successively (3Q sales of Year 1 compared with 4Q sales of Year 1). This gives analysts, investors, and extra stakeholders a thought of how much a company's sales are expanding over time.

Seeing Quarterly Revenue Growth

While taking a gander at a company's quarterly or annual financials, it isn't sufficient to just glance at the revenue for the current period. While investing in a company, an investor needs to see it develop or work on over time. Looking at a company's financials starting with one period then onto the next gives a reasonable image of its revenue growth rate and can assist investors with recognizing the catalyst for such growth.

For instance, Exxon Mobil generated $66.2 billion in revenue for the three months ended September 30, 2017, and $58.7 billion for the three months ended September 30, 2016. In this manner, the company saw quarterly revenue growth of 12.78%. Over time, assuming this rate proceeds, it will be a magnificent investment. Zooming out and working out quarterly growth rates for a long term period can give even more knowledge than essentially a six-or year period.

Limitations of Quarterly Revenue Growth

As an investor, there are certain limitations with zeroing in too much on quarterly revenue growth. For instance, the time between quarters is short. In any given multi-quarter period, the company's outcomes could change radically with business cycles, economic shocks, management changes, or other internal disturbances to a company's supply chain or operations.

While strong quarterly revenue growth is one measurement for progress, it's important to check out at several quarters and the consistency of growth over time. On the off chance that growth is just a few quarter phenomenon, it doesn't be guaranteed to look good for a longer-term investment.

On the flip side, investors ought not be extraordinarily concerned when a company sees poor quarterly revenue growth a couple of times in succession. For instance, companies that are seasonal, for example, vacationer companies, could have stale quarterly revenue growth at certain parts of the year and large spikes at different times. Once more, it's important to zoom out and search for a pattern in one or the other heading — growth or misfortune — to determine the course wherein a company is moving and on the off chance that it very well may be a decent expected buy, sell, hold, or short.

A few investors have voiced their disappointments over the quarterly reporting cycle refering to that it puts too much accentuation on short-term results over long-term, sustainable progress.

Features

• Poor growth for one or a couple of quarters isn't generally indicative of a terrible investment or poor performing company.
• Quarterly revenue growth measures the increase in a company's sales starting with one quarter then onto the next.
• Analysts can survey the sales of successive quarterly periods or the quarter of one year compared to a similar quarter of one more year.
• For an accurate image of growth, investors ought to take a gander at the growth of several quarters and how steady it is.