Earnings surprise (beat and miss)

An earnings surprise is the difference between what a company reports and what the analyst consensus expected. Beating the estimate is called a beat; falling short, a miss. It explains much of the sharp movement on reporting day, because the price already embedded the forecast and only reacts to what was not priced in. An honest surprise requires comparing like with like, and looking at revenue as well as profit: beating on earnings by cutting costs while sales disappoint tells a very different story.

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Definition for informational purposes. It is not financial advice nor a recommendation to buy or sell.