Earnings Surprise

Earnings Season

An earnings surprise is how far reported earnings per share land from the consensus estimate, usually stated as a percentage.

A result above consensus is called a beat, one below it a miss. Historically most companies beat, so a small beat may not surprise the market at all. The price reaction depends not just on this number but on revenue, margins and guidance too; stocks that beat and still fall are common.

Example

If consensus EPS was $2.00 and the company reports $2.10, the surprise is (2.10 - 2.00) / 2.00 = 5%.

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