Whisper Number Impact: Earnings Preview For ConAgra Foods

Apr. 2.13 | About: ConAgra Foods, (CAG)

ConAgra Foods (NYSE:CAG) is expected to report fiscal third-quarter earnings on Wednesday, April 3. The whisper number is $0.57, one cent ahead of analysts' estimates. CAG has a 67% positive surprise history, having topped the whisper number in 24 of the 36 earnings reports for which we have data.

Earnings History

  • Beat whisper: 24 quarters
  • Met whisper: 0 quarters
  • Missed whisper: 12 quarters

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 look at 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 30-trading day time frame:

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The strongest price movement of +0.9% comes within 20 trading days when the company reports earnings that beat the whisper number, and -1.8% within 30 trading days when the company reports earnings that miss the whisper number. The average price reaction (to the whisper number) is consistent (as expected), but very limited through 30 trading days when the company reports earnings.

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

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In the comparable quarter last year, the company reported earnings one cent ahead of the whisper number. Following that report, the stock realized a 0.5% loss in one trading day. Last quarter, the company reported earnings one cent ahead of the whisper number. Following that report the stock realized a 4.7% loss in five trading days. More recent earnings indicate the company to be on average an "opposite" price reactor to earnings, while overall historical data indicates the company to be (on average) a limited but as expected price reactor following earnings (beat the whisper number and see limited strength, miss and see limited weakness).

Enter your expectations and view more earnings information here, or let us know your expectations in the comments section below. Since 1998, WhisperNumber.com has been tracking and publishing "crowd sourced estimates" for earnings. We call these earnings expectations whisper numbers. Our whisper numbers are gained from individual investors and traders just like you who have registered with our site. While the whisper number itself is an important part of our analysis, a company's "price reaction" to beating or missing the whisper number expectation is the key. On average, companies that exceed the whisper are "rewarded," while companies that miss are "punished" following an earnings report.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.