Whisper Number: How Will Apple Investors React to Earnings?
Apple (NASDAQ:AAPL) is expected to report earnings on Monday, October 28. The whisper number is $8.20, twenty-eight cents ahead of the analysts’ estimate. Whispers range from a low of $8.00 to a high of $8.45. Apple has a 70 percent positive surprise history, having topped the whisper in 43 of the 61 earnings reports for which we have data.
- Beat whisper: 43 qtrs
- Met whisper: 1 qtrs
- Missed whisper: 17 qtrs
The whisper numbers have proven more accurate than analysts estimates — the whisper number has been closer to the actual earnings in 22 of the past 28 quarters. Our primary focus is on post earnings price movement. Knowing how likely a stock’s price will move following an earnings report can help you determine the best action to take (long or short). In other words, we look at what happens when the company beats or misses the whisper number expectation.
The table below indicates the average post earnings price movement within a one and thirty trading day timeframe.
The strongest price movement of +3.8 percent comes within thirty trading days when the company reports earnings that beat the whisper number, and +8.6 percent within thirty trading days when the company reports earnings that miss the whisper number. While the overall average price move is ‘positive’ (beat the whisper number and see strength, miss and see strength) when the company reports earnings, there is a limited negative price reaction within ten trading days when the company reports earnings ahead of the whisper number.