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Earnings Surprise

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Earnings Surprise
A situation in which a publicly-traded company's earnings report indicates higher or lower profit than analysts expected. This can lead to a sharp (and often unsustainable) increase or decrease in the share price. Many companies seek to avoid earnings surprises by pricing out, or slowly leaking information before the earnings report is published.
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.
Goodyear's shares jump 7% to three-year high by Rubber World
Then, after deducting expectations from realized earnings (and normalizing once again by the book value of assets in the year prior to the earnings announcement), we test whether the earnings surprise is positive.
Dividend initiations and earnings surprises by Lipson, Marc L.; Maquieira, Carlos P.; Megginson, William / Financial Management
In many cases, companies' stocks will rise in the days before an upside earnings surprise is expected, then drop on the news.
3RD-QUARTER EARNINGS REPORTS DON'T DISAPPOINT by Daily News (Los Angeles, CA)
 
 
 
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