Why an Earnings Miss Could be Better for Intel

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Intel (INTC) is expected to report earnings on Tuesday, October 13th. The whisper number is $0.61, two cents ahead of the analysts’ estimate and showing some confidence from the WhisperNumber community. Whispers range from a low of $0.45 to a high of $0.67. Intel has a 61% positive surprise history (having topped the whisper in 39 of the 64 earnings reports for which we have data).

Earnings history:

– Beat whisper: 39 qtrs
– Met whisper: 2 qtrs
– Missed whisper: 23 qtrs

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:

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The strongest price movement of -0.9% comes within twenty trading day when the company reports earnings that beat the whisper number, and +4.3% within thirty trading days when the company reports earnings that miss the whisper number. The overall average post earnings price move is ‘opposite’ (beat the whisper number and see weakness, miss and see strength) when the company reports earnings.

The table below indicates the most recent earnings reports and short-term price reaction:

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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 in-line with the whisper number. Following that report the stock realized a 3.5% gain in five trading days. Last quarter the company reported earnings thee cents ahead of the whisper number. Following that report the stock realized a 6.3% loss in thirty trading day. Overall historical data indicates the company to be (on average) an ‘opposite’ price reactor when the company reports earnings.

WhisperNumber provides detailed earnings analysis and earnings trade alerts. Learn more here.

[Image Courtesy of Kit Guru]

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