Costco (COST) reported earnings of $1.17 on Wednesday, November 7th. This was five cents short of the $1.22 whisper number, and  two cents short of  the analysts' estimate. The whisper number was showing some confidence from the WhisperNumber community with whispers ranging from a low of $1.18 to a high of $1.30. Costco has a 38% positive surprise history (having topped the whisper in 15 of the 39 earnings reports for which we have data).

Earnings history:

- Beat whisper: 15 qtrs
- Met whisper: 3 qtrs
- Missed whisper: 24 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 analyze 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:

(Click on image to enlarge)

The strongest price movement of +2.5% comes within twenty trading days when the company reports earnings that beat the whisper number and +1.4% within thirty trading days when the company reports earnings that miss the whisper number. The overall average post earnings price move is 'positive' but limited (beat the whisper number and see limited strength, miss and see limited strength) when the company reports earnings.

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

(Click on image to enlarge)

The company has reported earnings ahead of the whisper number in one of the past four quarters with a whisper number. In the comparable quarter last year, the company reported earnings twelve cents short the whisper number. Following that report, the stock realized a 1.5% loss in five trading days. Last quarter the company reported earnings one cent ahead of the whisper number. Following that report, the stock realized a 1.5% loss in five trading days. Overall historical data indicates the company to be (on average within thirty trading days) a 'positive' (but limited) price reactor when the company reports earnings.