What Will Your Holdings Do After an Earnings Report?

Includes: BAC, BTU, GS, JNJ, UNH
by: David Ristau

On Tuesday morning, many large firms from a variety of industries released their earnings statements. Estimates have many of the firms at or beating Q1 earnings. This report goes through the past five years (or 21 quarters) to attempt to see any trends forming when a firm either beats or misses estimates.

Five companies in particular have been studied, each from a distinct sector of the economy – Bank of America (NYSE:BAC), Goldman Sachs Group (NYSE:GS), Johnson & Johnson (NYSE:JNJ), Peabody Energy Corporation (NYSE:BTU) and UnitedHealth Group (NYSE:UNH).

So, what happens the week following when the earnings beat the consensus estimates?

Amount Beat

Positive When Beat

% Change When Beat


12/21 Quarters

4/12 Quarters



20/21 Quarters

9/20 Quarters



21/21 Quarters

11/21 Quarters



16/21 Quarters

10/16 Quarters



19/21 Quarters

10/19 Quarters


Every company averages an up week following the beat releases except for BAC. The largest of the gains come from BTU which was up an average of 7.4% a week following an earnings release greater than consensus. BTU has seen gains 63% of the time when it beat and UNH has seen gains 53% of the time.

What about when the companies fail to beat consensus?

Amount Lose

Negative When Lose

% Change When Lose


9/21 Quarters

8/9 Quarters



1/21 Quarters

0/1 Quarters



0/21 Quarters

0/0 Quarters



5/21 Quarters

3/5 Quarters



2/21 Quarters

2/2 Quarters


Four out of five companies when faced with lower earnings than estimated showed drops. Bank of America showed the greatest loss of any company with an average loss of 9.7% a week following its release.

For investing, take a look this morning to see what company beat and what company did not. For beats, BTU and UNH seem to have the best track record. We can compare average gains to pre-market gains to see if the stock would be a good pick up or has already priced in significant gains.Keep these statistics in mind when investigating these companies earnings.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in BTU, JNJ, GS, UNH over the next 72 hours.