Microsoft (MSFT) is expected to report earnings on Tuesday, July 21st. The whisper number is $0.56, in-line with the analysts’ estimate and showing neutral confidence from the WhisperNumber community. Whispers range from a low of $0.54 to a high of $0.59. Microsoft has a 54% positive surprise history (having topped the whisper in 36 of the 67 earnings reports for which we have data).
– Beat whisper: 36 qtrs
– Met whisper: 1 qtrs
– Missed whisper: 30 qtrs
The whisper number for Microsoft has been more accurate than analysts estimates in 78% of earnings reported since 1998.
Our primary focus is on post earnings price movement. Knowing how likely a stock’s price will move following an earnings report can help you determine the best action to take (long or short). In other words, we analyze what happens when the company beats or misses the whisper number expectation.
The table below indicates the average post earnings price movement within a one and thirty trading day timeframe:
The strongest price movement of -5.3% comes within ten trading days when the company reports earnings that beat the whisper number, and -2.2% within thirty trading days when the company reports earnings that miss the whisper number. The overall average post earnings price move is ‘negative’ (beat the whisper number and see weakness, miss and see weakness) when the company reports earnings.
The table below indicates the most recent earnings reports and short-term price reaction:
The company has reported earnings ahead of the whisper number in two of the past four quarters with a whisper number. In the comparable quarter last year the company reported earnings nine cents short of the whisper number. Following that report the stock realized a 3.2% loss in five trading days. Last quarter the company reported earnings eight cents ahead of the whisper number. Following that report the stock realized a 4.8% gain in one trading day. Overall historical data indicates the company to be (on average within thirty trading days) a ‘negative’ price reactor when the company reports earnings.
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