Whisper Number: What Will Rowan’s Shares Do Post Earnings?

Rowan Companies (NYSE:RDC) is expected to report earnings on Tuesday, August 6th. The whisper number is $0.51, five cents behind the analysts’ estimate. Whispers range from a low of $0.45 to a high of $0.55. RDC has a 61 percent positive surprise history (having topped the whisper in 20 of the 33 earnings reports for which we have data).

Earnings history:

– Beat whisper: 20 quarters
– Met whisper: 0 quarters
– Missed whisper: 13 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:

RDC813A

The strongest price movement of -1.2 percent comes within ten trading days when the company reports earnings that beat the whisper number, and -2.7 percent within twenty trading days when the company reports earnings that miss the whisper number. Although the strongest price moves are negative, the overall average price move is ‘as expected’ (beat the whisper number and see strength, miss and see weakness) when the company reports earnings.

The table below indicates the most recent earnings reports and short-term price reaction:

RDC813B

The company has reported earnings ahead of the whisper number in three of the past four quarters. In the comparable quarter last year the company reported earnings one cent ahead of the whisper number. Following that report the stock realized a 1.4 percent gain in five trading days. Last quarter the company reported earnings two cents ahead of the whisper number. Following that report the stock realized an 11.3 percent gain in ten trading days.  Overall historical data indicates the company to be (on average) an ‘as expected’ price reactor when the company reports earnings, with some inconsistency between ten and twenty days when the company reports earnings that top the whisper.

Enter your expectation and view more earnings information here, or let us know your expectation in the comments section below.

John Scherr is the founder and President of WhisperNumber.com, an independent financial research firm focused on earnings expectations. He is a regular contributor to CNBC and Fox Business Network, and has been featured in Barron’s, The Wall Street Journal, and MarketWatch. He is considered a leading expert on ‘whisper numbers’ and post earnings price movement analysis. WhisperNumber.com provides specific earnings trade alerts to take advantage of earnings report price movement with their Whisper Reactors subscription service.

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