Fundamental analysis
Earnings surprise
Definition
The difference between the actual figure and the consensus, often shown as a percentage: EPS of $1.30 against $1.20 expected is a surprise of about +8%.
Example
Say the consensus for company XYZ’s quarterly EPS is $0.80 and it reports $0.72: a surprise of −$0.08, or −10% of the estimate. Percentages can mislead on small numbers, though: EPS of $0.10 against $0.05 expected is a +100% surprise, even though the gap is only five cents.
Hypothetical numbers, for illustration only.
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