What to look for in a earning report

Dear forumers, The earning season is here, more companies will report their earning soon. I wish to start a new topic to consolidate everyone's wisdoms on what they think it's important in a earning report. Hope it can generate much discussion and unearth more gems by improving on everyone's knowledge. Please provide details if possible. For example what would consider as low PE Let me share my 2 cents worth and perhaps simplistic thoughts First, outlook statement. Second, gross margin and net profit margin. Above 20 preferred although it depends on industry. Third, consistency in positive operating cash flow. Fourth, gearing. Look out for 50% gearing or those with a lot of short term debts that is larger than annual net profits. These are potential red flags Asset per share

I would like a company that demonstrates positive surprises in gross margins & revenue - this tells me that it's prodts & services hv become more in demand & higher prices can be charged for them. This happy situation can happen as part of the company's growth ( which has been steady in recent times ) or it may be reflecting a recovery from tough times. An example of the first situation is Straco, which owns a popular aquarium in Shanghai. Example of second situation is China Fibretech which you guys have much discussion already in this forum