Seeking Alpha
Event-driven, short-term horizon, long/short equity, special situations
Profile| Send Message|
( followers)  

Chevron Corp. (NYSE:CVX) is expected to report earnings on Friday, April 26. The whisper number is $3.05, one cent behind analysts' estimate. CVX has a 52% positive surprise history, having topped the whisper number in 13 of the 25 earnings reports for which we have data.

Earnings History

  • Beat whisper: 13 quarters
  • Met whisper: 1 quarter
  • Missed whisper: 11 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:

Click to enlarge images.

The strongest price movement of +1.2% comes within 10 trading days when the company reports earnings that beat the whisper number, and -1.4% within 10 trading days when the company reports earnings that miss the whisper number. While the strongest price moves are as expected, the overall average price movement is inconsistent through 30 trading days when the company reports earnings.

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

In the comparable quarter last year the company reported earnings six cents ahead of the whisper number. Following that report the stock realized a 0.7% loss in five trading days. Last quarter the company reported earnings 57 cents ahead of the whisper number. Following that report the stock realized a 0.6% gain in one trading day, and added an additional 2% through 30 trading days. Overall historical data indicates the company to be (on average) an inconsistent price reactor through 30 trading days when the company reports earnings.

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. Trading on whispers is a technical play on market psychology, rather than a bet on a company's fundamental strengths.

Source: Whisper Number Impact: Earnings Preview For Chevron