Earnings Surprises and the Drift After
After a big earnings surprise, prices have tended to keep moving the same way for weeks. These are the biggest surprises of the last two months, measured against each company's own past.
This list will appear after the next update of company financial statements.
How the surprise score works
We have no analyst forecasts, so the expected number is the same quarter a year earlier. The surprise score is this quarter's diluted earnings per share minus that year-ago figure, divided by how much that change usually varies for the company (the standard deviation over up to eight earlier quarters). A score of +2 means earnings beat last year by twice the usual swing. This is the "standardized unexpected earnings" measure from Bernard and Thomas (1989), who first documented the drift.
The report date is the company's 8-K with item 2.02, results of operations. Price moves are counted from the close of that week, so the jump on the day itself is left out.
What to keep in mind
Researchers have found the drift has grown weaker since it became widely known, especially in large companies. One-off gains and losses can make a surprise look bigger than it is: check the report before reading much into a score.
Quarterly EPS from company XBRL data on SEC EDGAR. Fourth quarters are often reported only for the full year, so some reports are missing. Prices are weekly closes adjusted for splits. Not investment advice. See also the earnings calendar.
About this page
WallStPal explains public SEC filings and congressional stock trade reports in plain English. Nothing is for sale; the site is free and supported by ads.
How to read it
- Form 4
- The form a company insider (officer, director or owner of more than 10%) must file with the SEC within two business days of buying or selling the company's shares.
- 13F
- A quarterly list of U.S. stocks held by an investment manager with more than $100 million, filed within 45 days after each quarter ends.
- STOCK Act
- A 2012 law that requires members of Congress to report stock trades by themselves, a spouse or a dependent child within 45 days.
A real example
In January 2016, when bank stocks were falling, JPMorgan Chase CEO Jamie Dimon bought 500,000 JPMorgan shares with his own money, worth about $26 million. His Form 4 made the purchase public within days, and investors read it as a strong sign of confidence.
Explain it like I'm 13
We read the long, boring forms that grown-ups file with the government and tell you what they say in normal words.
Data from public SEC filings and congressional reports. Information, not investment advice. Check every number against the filing linked on the page.