Sector Breakdown of Earnings Day Performance

As we noted in our last post, the average stock went down 0.96% on its earnings report day this earnings season.  Below we provide a breakdown of average earnings day performance by sector.  Overall, Consumer Staples stocks reporting earnings averaged the biggest one-day declines at -2.6%.  Energy stocks averaged a decline of 2.2% on earnings, and Technology, Utilities, and Health Care names all averaged a decline of more than 1%.  The Telecom sector is the only one whose stocks averaged gains on their report days.

As shown, the average stock that missed earnings estimates went down much more than the average stock that beat estimates went up.  Consumer Staples stocks that missed averaged a one-day decline of 7.20%, while stocks in the sector that beat averaged a small gain of 0.40% on the day.  Energy stocks that missed averaged a decline of 4.4%, while ones that beat also averaged a decline!  Industrial and Telecom stocks are the only ones that averaged gains of more than 1% on their report days when they beat earnings estimates.  Based on performance data, the companies that reported strong numbers this earnings season were expected to do so, and thus they didn't see much of a positive reaction at all.  The companies that missed estimates were expected to beat estimates, and they subsequently got taken to the woodshed. 

(Note: We just published a 9-page report breaking down this past earnings season and getting investors ready for the off-season.  Subscribe to Bespoke Premium to access the report.)