Earnings season began at the start of this week with Pepsi (PEP) and the first of the major US banks and brokers reporting Q2 numbers. It was a light week with only 32 companies reporting through Thursday, but in the coming weeks, we’ll see 100+ reports on multiple trading days.
From our Earnings Explorer tool, below is a recap of the results from this week’s earnings reports. 78% of companies that reported this week beat consensus analyst EPS estimates, while 72% topped consensus sales estimates. Those are both strong numbers. In terms of future projections, 16% of companies raised guidance, and not one company lowered guidance. That’s rare even with the very low number of reports so far.
While guidance and beat rates were strong, investors still used earnings reports as an opportunity to sell. The average one-day share price change this week for companies in reaction to their earnings reports was a decline of 0.57%. All of those declines came on the initial gap down at the open, however. After averaging a gap down of 0.76% at the open of trading following the earnings release, the average stock that reported gained 0.21% from the open to the close. (The gap down of 0.76% and the open to close gain of 0.21% adds up to the full-day decline of 0.57% mentioned earlier.)
Below is a table showing all 32 companies that reported Q2 numbers this week (through Thursday). The list is sorted by one-day share price reaction from best to worst. Alcoa (AA) had the best price reaction to earnings this week with a gain of 6.39% yesterday. WNS Global (WNS) put up the second-biggest gain at 6.36%. The next best-performing stocks in reaction to earnings this week only gained 3%+ — USB and HOMB. Other stocks that reported this week that gained in response to their earnings reports include Morgan Stanley (MS), Goldman Sachs (GS), Taiwan Semi (TSM), Johnson & Johnson (JNJ), and JP Morgan (JPM).
On the downside, AngioDynamics (ANGO) saw the worst share price reaction to earnings this week when it fell 11.51% on Thursday. Sleep Number (SNBR) was second-worst with a one-day drop of 9.19% yesterday as well.
While MS, GS, and JPM all posted gains in reaction to earnings this week, other banks like Citi (C), Wells Fargo (WFC), and Bank of America (BAC) reacted negatively with each falling 4% or more. Click here to view Bespoke’s premium membership options for our best research available. Our Earnings Explorer tool that gives you access to the information in this post is available fully at the Bespoke Institutional level.