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Earnings surprise

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earnings surprise
Earnings reported by a company that are different from the earnings that had been expected by the investment community. An earnings surprise often produces a sharp increase or decrease in the market price of a stock.

Earnings surprise. When a company's earnings report either exceeds or fails to meet analysts' estimates, it's called an earnings surprise.

An upside surprise occurs when a company reports higher earnings than analysts predicted and usually triggers an increase in the stock price.

A negative surprise, on the other hand, occurs when a company fails to meet expectations and often causes the stock's price to fall. Companies try hard to avoid negative surprises since even a small deviation can create a big stir.



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Saul Ludwic, analyst with Key-Banc Capital Markets, Cleveland, OH, wrote that Goodyear may have a positive earnings surprise when it reports second quarter results.
Beyond reducing the chance for a sudden earnings surprise, Spreadsheet Server also gives CFOs the ability to identify questionable money flows faster, reducing the risk of fraud, misappropriation or money laundering.
In many cases, companies' stocks will rise in the days before an upside earnings surprise is expected, then drop on the news.
 
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