Monday, May 22, 2017

Earnings Season Roundup

First quarter earnings season is now in the books. A total of 2,450 companies reported earnings, and of these, exactly 1,500 of them reported better than expected EPS numbers. That’s a 61.2 percent earnings beat rate.

Those stocks, not surprisingly, tended to rise in value after their reporting dates. On average, the stocks that beat their earnings estimates this season gained 1.97 percent on their earnings reaction days.

Since 61.2 percent of companies beat EPS estimates, that means 29.8 percent of them missed their estimates. These stocks averaged a one-day decline of 3.21 percent on their earnings reaction days. In other words, for those that missed, the drop was worse than the gain was for those that exceeded estimates.

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