While there aren’t a lot of earnings reports on tap after the close today, there will be some notable reports from Intel (INTC), Snap (SNAP), and Twitter (TWTR). Investors have plenty of reasons to be bullish or bearish on these companies ahead of earnings, but we thought we’d provide a brief snapshot of how each stock has typically reacted to earnings reports in the past on both an overall basis and broken out by earnings seasons. The snapshots below are from our Earnings Explorer tool and show a breakdown of how often each stock exceeds EPS and revenue estimates as well as the percentage of time each one raises guidance. In addition, we then show how each stock has historically reacted to its earnings report on the first trading day after the report, and we break that performance out based on the average opening gap, the change from the open to close, the full-day return, and volatility (absolute average percent change on the day).
Starting with INTC, historically the stock has topped EPS forecasts 78% of the time, exceeded sales forecasts 76% of the time, and raised guidance 25% of the time. In the Q2 earnings season, the company’s EPS and sales beat rates are both less than average, but the company has raised guidance more often in the current earnings season than any other quarter. In terms of stock price performance, INTC typically doesn’t react particularly well to its earnings reports. For all of its earnings reports over the last 20 years, INTC has only risen on its earnings reaction day half of the time for an average one-day decline of 0.79%. In the Q2 earnings season specifically, INTC has been even weaker with an average one-day decline of 1.41%. When it comes to earnings, the only earnings season where the stock has reacted positively to earnings more often than it has reacted negatively is during the Q1 earnings season (April reports). More recently, earnings reports haven’t been particularly friendly to INTC as the stock has declined on its earnings reaction day following four of the last five reports.
Snap (SNAP) has been public for less than five years, and its earnings track record has been mixed. While the stock’s average one-day reaction to earnings has been a gain of 2.82%, it has only posted positive returns in reaction to earnings 41% of the time. Q2 earnings season has been even tougher on SNAP stock as it has only risen in reaction to earnings following one of its four Q2 reports for an average decline of 2.13%. More recently, the stock has traded more positively to earnings with positive returns following four of its last five earnings reports. One thing you can count on when it comes to SNAP and earnings is the stock will be volatile. The stock’s average one-day reaction to earnings has been a move of +/- 17.2%.
Twitter (TWTR) has been public for nearly twice as long as SNAP, and even with a larger sample size, it hasn’t typically reacted well to earnings. Despite topping EPS and revenue estimates 80% of the time, SNAP’s average one-day reaction to earnings has been a decline of 2.94% with positive returns just 40% of the time. During the Q2 earnings season, TWTR’s EPS and revenue beat rates haven’t been as strong as the overall averages, and it shows in the stock’s average reaction to earnings. Of the seven Q2 earnings reports for TWTR, the stock’s average performance is a decline of 4.39% with gains just 43% of the time. The only quarter that has been weaker is the Q1 earnings season, and true to form, the stock dropped more than 15% on the day after its report back in April. You can track these stats for all of the stocks you follow using our Earnings Explorer tool. The Earnings Explorer is available with a Bespoke Institutional trial, which you can start today.