Roughly 2,100 companies reported earnings during the unofficial Q1 2018 reporting period that ran from April 9th through May 18th.  We track the one-day stock price performance of every company that reports earnings.  This obviously helps us monitor individual stock performance, but it also gives us an idea of how investors are reacting to earnings results at the macro level.  (In order to track performance, remember that for a stock that reports earnings in the morning before the open of trading, we use its price change on that trading day.  For a stock that reports earnings after the close of trading, we use its price change on the next trading day.)

Below is a chart that shows the one-day price reaction (%) for every stock that reported earnings during the Q1 reporting period.  We’ve separated the distribution by stocks that beat EPS estimates, missed EPS estimates, and reported inline EPS estimates.  As shown, 67.9% of stocks beat EPS estimates, while 24.5% missed and 7.7% reported inline.  The average stock that beat EPS estimates gained 1.78% on its earnings reaction day.  The average stock that missed EPS estimates had a one-day drop of 2.75% in response, while the average inline report saw a one-day price drop of 0.73%.

While the average stock that beat EPS estimates gained 1.78% on its earnings reaction day, you can see in the chart that there were hundreds of stocks that beat but still fell in price.  Similarly, while most stocks that missed EPS estimates fell on the news, there were plenty that gained as well.

For investors looking for detailed earnings report analysis, our Earnings Screener is an amazing tool.  The Earnings Screener allows users to pull up historical quarterly earnings report analysis for every US stock going back to 2001.  The Screener also allows users to track macro trends related to earnings using our “Aggregator” functionality.

The chart below uses data pulled directly from our Earnings Screener.  It shows the average one-day stock price reaction to various earnings outcomes during the Q1 2018 reporting period compared to all periods since 2001.  As shown, the average stock that beat EPS estimates this season gained 1.78% on its earnings reaction day.  Since 2001, the average stock that has beaten EPS estimates has gained 1.90% on its earnings reaction day.  So this season, earnings beats gained slightly less than normal.

For stocks that missed EPS estimates, this season they fell an average of 2.75% on their earnings reaction days.  Since 2001, stocks that have missed EPS estimates have averaged a one-day decline of 3.48%.  So this season, stocks that missed EPS estimates fell much less than they usually do.  Stocks that reported inline EPS fell a lot less than they normally do as well.  Combining the beat, miss, and inline outcomes, the average one-day change for all stocks that reported this season was +0.48%.  Since 2001, the average one-day change for all stocks that have reported earnings has been +0.08%.  That means that this season, stocks reacted much more positively than usual, and the reason was because the inline and missed reports fell less than they usually do.

To gain access to our Earnings Screener tool, please sign up for a Bespoke Institutional trial.  The Screener is only available at the Bespoke Institutional level.