A profit warning is a warning declaration issued by a

listed company A public company is a company whose ownership is organized via shares of stock which are intended to be freely traded on a stock exchange or in over-the-counter markets. A public (publicly traded) company can be listed on a stock exchange (list ...

to investors through a

stock exchange A stock exchange, securities exchange, or bourse is an exchange where stockbrokers and traders can buy and sell securities, such as shares of stock, bonds and other financial instruments. Stock exchanges may also provide facilities for th ...

. It warns investors that the profit of the company in the coming quarter will significantly decline when compared with that of the same quarter of previous year, or the company may even make a loss. Investors should be aware of the possible loss when buying or selling its

stock In finance, stock (also capital stock) consists of all the shares by which ownership of a corporation or company is divided.Longman Business English Dictionary: "stock - ''especially AmE'' one of the shares into which ownership of a company ...

. For example, William Hill Bookmakers issued a profit warning on 23 March 2016 which they attributed to "a bad run of results and customers imposing betting limits on themselves". Company

share prices A share price is the price of a single share of a number of saleable equity shares of a company. In layman's terms, the stock price is the highest amount someone is willing to pay for the stock, or the lowest amount that it can be bought for. B ...

often fall following a profit warning being issued. Sometimes, "profit warning" is considered to be a neutral term and it refers to "estimated results improvement". Some companies may issue a "profit warning" to inform investors that their expected profit will obviously increase in the coming quarter. The expression has been criticized for being misleading and obscure, because it means profits are lower than expected or previously announced rather than a loss. It was a finalist for taboo word of the year in Germany in 2001, and in Austria in 2008.Pressemitteilung
, ''Press release'', accessed 18 May 2017

References

Stock market {{Stockexchange-stub