Cooper Tire & Rubber (NYSE:CTB) is expected to report fiscal fourth quarter earnings on Monday, February 25th. The whisper number is $0.84, one cent behind the analysts' estimate. CTB has a 57% positive surprise history (having topped the whisper in 12 of the 21 earnings reports for which we have data).
- Beat whisper: 12 qtrs
- Met whisper: 0 qtrs
- Missed whisper: 9 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 thirty trading day timeframe:
The strongest price movement of +4.7% comes within twenty trading days when the company reports earnings that beat the whisper number, and -6.2% within thirty trading days when the company reports earnings that miss the whisper number.
The table below indicates the most recent earnings reports and short-term price reaction:
The company has not seen much attention from investors over the past eight quarters as we only have two quarters with a whisper number for that period. But when the company beat the whisper in August of 2012 the price reaction was positive (in-line with the overall average). In October of 2011 the company reported earnings short of the whisper number and the price reaction was negative (also in-line with the averages). Historical price reaction analysis indicates the company tends to see positive price movement when they report earnings ahead of the whisper, and negative price movement when they report earnings short of the whisper number.
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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.
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.