Intel’s Whisper Number Lacking Confidence
Intel (NASDAQ:INTC) is expected to report earnings on Tuesday, April 15. The whisper number is $0.35, two cents behind the analysts’ estimate. Intel has a 59 percent positive surprise history (having topped the whisper in 34 of the 58 earnings reports for which we have data).
- Beat whisper: 34 qtrs
- Met whisper: 1 qtrs
- Missed whisper: 23 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 thirty trading day timeframe:
The strongest price movement of -0.8 percent comes within one trading day when the company reports earnings that beat the whisper number, and +4.3 percent within thirty trading days when the company reports earnings that miss the whisper number. The overall average price move is ‘opposite’ (beat the whisper number and see weakness, miss and see strength) when the company reports earnings.
The table below indicates the most recent earnings reports and short-term price reaction:
The company has reported earnings ahead of the whisper number in two of the past four quarters with a whisper number. In the comparable quarter last year the company reported earnings two cents short of the whisper number. Following that report the stock realized a 5.2 percent gain in five trading days. Last quarter the company reported earnings one cent ahead of the whisper number. Following that report the stock realized a 4.3 percent loss in twenty trading days. Overall historical data indicates the company to be (on average) an ‘opposite’ price reactor when the company reports earnings.
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.