E What Will Oracle's Shares Do Post Earnings?

Oracle (ORCL) is expected to report earnings on Wednesday, March 15th. The whisper number is $0.61, one cent behind the analysts' estimate and showing no confidence from the WhisperNumber community. Whispers range from a low of $0.55 to a high of $0.64. Oracle has a 55% positive surprise history (having topped the whisper in 39 of the 67 earnings reports for which we have data).

Earnings history:

  • Beat whisper: 39 qtrs
  • Met whisper: 3 qtrs
  • Missed whisper: 29 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:

The strongest price movement of +1.3% comes within ten trading days when the company reports earnings that beat the whisper number, and +3.0% within thirty trading days when the company reports earnings that miss the whisper number. While the strongest price moves are positive, the overall average post earnings price move is 'as expected' (beat the whisper number and see strength, miss and see weakness) 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 one of the past four quarters with a whisper number. In the comparable quarter last year the company reported earnings in-line with the whisper number. Following that report the stock realized a 4.6% gain in five trading days. Last quarter the company reported earnings two cents short of the whisper number. Following that report the stock realized a 4.4% loss in ten trading days. Overall historical data indicates the company to be (on average) an 'as expected' price reactor when the company reports earnings.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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