What it means
Reports usually land before the open or after the close, so stocks often gap.
In practice
Earnings are the scheduled moments when a company's share price can be revalued. Traders watch the results against analysts' expectations and listen for the outlook, which often matters more than the quarter just finished.
Many avoid holding short-term positions through the report because the outcome is a gamble, and trade the reaction afterwards instead.
What to watch for
A stock can fall after good results if expectations were even higher. The move usually happens as a gap outside regular hours, so a stop-loss gives no protection from it.