Whisper Number: Patience Required for Gains Following Sprint Earnings

Sprint (NYSE:S) is expected to report earnings on Tuesday, July 30th.  The whisper number is -$0.32, three cents behind the analysts’ estimate. Whispers range from a low of -$0.40 to a high of -$0.25.  S has a 47 percent positive surprise history (having topped the whisper in 17 of the 36 earnings reports for which we have data).

Earnings history:

– Beat whisper: 17 quarters
– Met whisper: 0 quarters
– Missed whisper: 19 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:

S713A

The strongest price movement of +2.3 percent comes within five trading days when the company reports earnings that beat the whisper number, and +7.6 percent within thirty trading days when the company reports earnings that miss the whisper number. While the strongest price moves are positive, the overall average price move is inconsistent when the company reports earnings that fall short of the whisper number.

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

S713B

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 nine cents short of the whisper number. Following that report the stock realized a 10.7 percent gain in five trading days. Last quarter the company reported earnings six cents ahead of the whisper number. Following that report the stock realized a 3.3 percent gain in thirty trading days.  Overall historical data indicates the company to be (on average) a ‘positive’ price reactor when the company reports earnings, but when the company reports earnings short of the whisper number, the average price move is negative through ten trading days.

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

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