Earnings Annoucement Analysis

Besides research-related and data analysis activities, our team also deals with automation and simplification of analytical processes. In today’s post, we would like to introduce the first type of report – quarterly earnings announcement and its analysis.

The report follows the impact of the announced Earnings (with the quarterly period) on the price on the selected assets. Let’s take Deutsche Boerse AG as an example.  An investment analyst or a portfolio manager responsible for the decision-making process shall receive the necessary information:

• Earnings Announcement date
• Earnings Announcement time
• Comparable Earnings per Share (EPS)
• Earnings per Share (EPS) current quarter
• Earnings per Share (EPS) estimated value

The report below gives the analyst as an insight into how strongly and in what direction the market has reacted to the reported results. The sentiment of movements, of course, determines the ratio between the estimated EPS value and the announced value. If the current value is higher than estimated, it’s a „positive information“ and if the current values are lower than expected it’s „negative information“.

The practical use consists of a given overview of how the markets have absorbed information about the published results of the analyzed assets in recent quarters. Next a balance of positive and negative deviations in real values from those brings useful information, indicating whether the expected results are systematically underestimated, in line with the announced results or overestimated.

The report can be used by investments analysts or portfolio managers to receive a quick overview of how the analyzed assets reacted to the Earnings Announcement of the results in past quarters, thus, for example, obtaining information on whether the expected results in the summary are overestimated or undervalued.

Michal Dufek