What is an 'Earnings Surprise'

An earnings surprise occurs when a company's reported quarterly or annual profits are above or below analysts' expectations. These analysts, who work for a variety of financial firms and reporting agencies, base their expectations on a variety of sources - previous quarterly or annual reports, current market conditions, as well as the company's own earnings' predictions or "guidance."

BREAKING DOWN 'Earnings Surprise'

Earnings surprises can have a huge impact on a company's stock price. Several studies suggest that positive earnings surprises not only lead to an immediate hike in a stock's price, but also to a gradual increase over time. Hence, it's not surprising that some companies are known for routinely beating earning projections. A negative earnings surprise will usually result in a decline in share price.

  1. Quarterly Earnings Report

    A quarterly filing made by public companies to report their performance. ...
  2. Accounting Earnings

    The amount of money a company has earned during a given period, ...
  3. Earnings Announcement

    An official public statement of a company's profitability for ...
  4. Quality Of Earnings

    The amount of earnings attributable to higher sales or lower ...
  5. Annual Return

    Annual return is the compound average rate of return for a stock, ...
  6. Triple Play

    In investments, a stock that simultaneously beats analyst expectations ...
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