Baker Hughes (NYSE:BHI) is expected to report fiscal first quarter earnings on Friday, April 19th. The whisper number is $0.66, three cents ahead of the analysts' estimate. BHI has a 53% positive surprise history (having topped the whisper in 19 of the 36 earnings reports for which we have data).
- Beat whisper: 19 qtrs
- Met whisper: 0 qtrs
- Missed whisper: 17 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 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 timeframe:
The strongest price movement of -1.3% comes within 20 trading days when the company reports earnings that beat the whisper number, and -3.6% within 20 trading days when the company reports earnings that miss the whisper number. The average price movement through 30 trading days when the company reports earnings is negative (beat the whisper see weakness, miss and see weakness). There is limited but positive price movement through five trading days when the company reports earnings that top the whisper number.
The table below indicates the most recent earnings reports and short-term price reaction:
In the comparable quarter last year, the company reported earnings four cents ahead of the whisper number. Following that report, the stock realized a 3.0% gain in five trading days. Last quarter, the company reported earnings 13 cents short of the whisper number. Following that report, the stock realized a 1.6% gain in five trading days. Overall historical data indicates the company to be (on average) a negative price reactor through 30 trading days when the company reports earnings.
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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 that 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.