UK Accounting Glossary
An earnings surprise occurs any time a stock’s earnings do not match anticipated earnings. If the stock’s earnings are higher than the market expected then the earnings surprise is positive — and if earnings are less than the market was looking for then the earnings surprise is negative. A positive earnings surprise often results in a bump up in a stock’s price, and a negative earnings surprise can result in a drop in a stock’s value. Unless an investor has done extensive research into a company, it is often difficult to anticipate ahead of time if there will be an earnings surprise when a company’s earnings are released, and therefore difficult to predict when there might be a positive earnings surprise or a negative earnings surprise.
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This glossary post was last updated: 9th February 2020.