A Preview of Q3 Earnings: Alcoa Kicks Things Off

Below is a simple line chart of the number of US companies reporting by day beginning this week. Interestingly, this week is relatively calm compared to the very busy weeks in late October. The peak of earnings season comes on Thursday, October 25th when 434 companies are currently scheduled to report.

We also highlight the US companies that have had the largest increase in their quarterly earnings estimates over the last four weeks. These estimate increases mean the companies are getting stronger, but they also mean expectations are high. As shown, FMD tops the list with an increase of 72 cents per share over the past 28 days.

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In order to help you stay on top of earnings season, Bespoke has created an in-depth calendar that highlights over 2,000 US stocks due to report in the next month and a half. The calendar is more advanced than typical earnings calendars because it includes detailed information about each stock's historical reports. We looked at each company's quarterly reports going back to the end of 2001 and calculated the percentage of the time the company has beaten or missed EPS and revenue estimates as well as guided higher (we only provide beat rates for companies that we have at least 8 historical report dates for).

In addition, we also provide the average one-day price change following earnings reports to highlight how the stock typically trades on earnings. The average absolute one-day price change is included as well to highlight the stock's volatility in reaction to earnings.

Alcoa (AA) is the first big company to kick off earnings season, so we will use it as an example. As shown on the calendar, the stock is due to report after the close on October 9th. Analysts are expecting earnings of 66 cents per share. Going back to 2001, AA has beaten EPS and revenue estimates 38% of the time. The stock has averaged a loss of 88 bps on the first trading day following earnings based on prior reports.

Comments

[jwiggington]

Any ideas on who potential purchasers for Alcoa's automotive castings and packaging divisions could be? I read Tata Group could a possibility www.newsvisual.com/new... Anyone hear anything different?