Stock Performance Subsequent to Combinations in Quarterly Revenue Surprise, Earnings Surprise, Guidance, Valuation, and Report Time

Journal of Economics and Finance, 2020, DOI 10.1007/s12197-020-09531-7

30 Pages Posted: 15 Jun 2019 Last revised: 5 Oct 2020

See all articles by Jose Alvarado

Jose Alvarado

Sam Houston State University - Department of General Business and Finance

Lindsay Clark

Sam Houston State University - Department of General Business and Finance

Jose A. Gutierrez

Sam Houston State University

Date Written: June 3, 2019

Abstract

Finance literature highlights various reasons for stock performance subsequent to earnings announcements. However, other moving parts in these scenarios must also be simultaneously specified. While both revenue and earnings surprises are important for determining stock performance, forward-looking guidance and firm valuation prior to earnings should also be considered. Additionally, analyses that solely consider market-level data miss important subtleties evident in a sector-specific study, as “normal” growth and valuation metrics across sectors widely differ. We differentiate between firms that announce earnings during the evening hours (after the close) and firms that announce earnings during the morning hours (prior to the open).

Keywords: Quarterly expectations, Analyst consensus, Guidance, Trading strategy

JEL Classification: G11, G12, G14, G17

Suggested Citation

Alvarado, Jose and Clark, Lindsay and Gutierrez, Jose A., Stock Performance Subsequent to Combinations in Quarterly Revenue Surprise, Earnings Surprise, Guidance, Valuation, and Report Time (June 3, 2019). Journal of Economics and Finance, 2020, DOI 10.1007/s12197-020-09531-7, Available at SSRN: https://ssrn.com/abstract=3398406 or http://dx.doi.org/10.2139/ssrn.3398406

Jose Alvarado

Sam Houston State University - Department of General Business and Finance ( email )

United States

Lindsay Clark

Sam Houston State University - Department of General Business and Finance ( email )

United States

Jose A. Gutierrez (Contact Author)

Sam Houston State University ( email )

1803 Ave I
Huntsville, TX 77341
United States

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