Whisper Number: Even an Earnings Miss for BMC Software Could Be Positive

BMC Software (NASDAQ:BMC) is expected to report earnings on Monday, July 29th. The whisper number is $0.72, seven cents behind the analysts’ estimate. BMC has a 58 percent positive surprise history (having topped the whisper in 19 of the 33 earnings reports for which we have data).

Earnings history:

– Beat whisper: 19 quarters
– Met whisper: 1 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:

BMC713A

The strongest price movement of +2.2 percent comes within thirty trading days when the company reports earnings that beat the whisper number, and +3.4 percent within thirty trading days when the company reports earnings that miss the whisper number. The overall average price move is positive (beat the whisper number and see strength, miss and see strength) when the company reports earnings.

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

BMC713B

The company has reported earnings ahead of the whisper number in one of the past four quarters. In the comparable quarter last year the company reported earnings ten cents short of the whisper number. Following that report the stock realized a 10.4 percent gain in five trading days. Last quarter the company reported earnings eleven cents short of the whisper number. Following that report the stock realized a 0.4 percent gain in ten trading days.  Overall historical data indicates the company to be (on average) a ‘positive’ price reactor when the company reports earnings.

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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