How Does Apple Typically Move Post Earnings?

After the market’s close on July 26, the most valuable company will report its third quarter earnings. Apple (AAPL) is expected to report earnings of $1.39 per share on revenue of $41.85 billion. More important than the company’s numbers, though, is how the market reacts to them.

Being such a well-covered stock and one that is widely held, there is a lot of buzz associated with Apple’s quarterly reports. This article intends to cut through the noise by bringing your attention to trends that have emerged throughout Apple’s quarterly earnings.

Again, in my view, more money can be made by focusing on the market’s reaction to news rather than the news itself. After all, it is not an earnings release that moves a stock; rather, it is the reaction to it by other traders and investors.

The study on which this article is focused analyzed the 69 most previous earnings reports from Apple (dating back to 1999). It looked at Apple’s performance in the days prior to the earnings report, as well as the stock’s performance in the days following.

Specifically, the study identified and analyzed instances in which Apple was at a 5, 10, or 20 day high or low (or neither) going into an earnings report, along with the stock’s return 1, 2, 3, 4, 5, and 6 days later.

Because Apple reports after the bell, the stock’s performance prior to the earnings release includes the day on which it reports. For example, Apple’s January 15, 2003 earnings report also marked the stock’s lowest closing price over the last 10 trading days. As such, this earnings report was flagged as a 10 day low.

Apple’s post-earnings returns were calculated from the close of the prior session. Sticking with the above example, Apple’s 1 day return is calculated from the close of January 15 to the close of January 16, the stock’s 2 day return is calculated from the close of January 15 to the close of January 17, and so on.

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I have no position in any of the tickers mentioned above, and have no plans to initiate a position in any of the aforementioned tickers within the next 72 hours.

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