The third quarter earnings season came to an end earlier this week.  We’ve got full coverage in this week’s Bespoke Report newsletter due out later today, but below is a chart that sums up the season pretty well.  This chart highlights the one-day price reaction that each stock experienced on its earnings reaction day this season.  (For stocks that report before the open, we use their price change on that trading day.  For stocks that report after the close, we use their price change on the next trading day.)  We’ve broken the distribution up by stocks that beat earnings estimates, missed earnings estimates, and reported inline earnings estimates.

As shown, 1,522 stocks beat earnings estimates this season, which equates to a 59.3% beat rate.  These stocks that beat estimates averaged a gain of 2.14% on their earnings reaction days this season.  A total of 785 stocks missed earnings estimates this season — a 30.6% miss rate — and these stocks averaged a decline of 3.87% on their earnings reaction days.  Finally, 260 stocks (10.1% of all reports) reported inline earnings, and these stocks averaged a one-day move of -2.13% on their earnings reaction days.  With an average decline of 2.13% for stocks that reported inline earnings, simply meeting expectations was clearly not enough for investors this season.


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