Whisper Number: How Will Xerox Investors React to Earnings?
Xerox (NYSE:XRX) is expected to report earnings on Friday. The whisper number is 28 cents, 1 cent behind the analysts’ estimate. Whispers range from a low of 27 cents to a high of 30 cents. XRX has a 57 percent positive surprise history, having topped the whisper in 21 of the 37 earnings reports for which we have data.
- Beat whisper: 21 qtrs
- Met whisper: 1 qtrs
- Missed whisper: 15 qtrs
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 30 trading day timeframe:
The strongest price movement of +3.4 percent comes within 30 trading days when the company reports earnings that beat the whisper number, and -10.4 percent within 10 trading days when the company reports earnings that miss the whisper number. While the strongest price moves are “as expected,” the overall average price move is “negative” (beat the whisper number and see weakness, miss and see weakness) when the company reports earnings.