Who this is for — Earnings traders and fundamental investors: markets react to beat/miss vs consensus and management outlook — guidance often beats the printed quarter.
Earnings guidance is forward guidance from management on earnings, revenue, margins or FCF — quarterly/annual range, updated each earnings call. Compared to analyst consensus and realized EPS.
In plain terms — «Where management thinks the company is going» — the market prices the future, not just the last quarter.
Types and language
| Form | Note |
|---|---|
| Quantitative range | EPS $X–$Y, revenue band |
| Qualitative | «Cautiously optimistic», headwinds |
| Withdrawn | Macro uncertainty — often sell-off |
| Raise / lower | Revision vs prior guide |
Sandbagging (conservative guide) is common — beat expected but reaction depends on raise size and call tone.
Trading earnings
- Pre-market: actual vs consensus + new guidance
- «Beat and raise» vs «beat and lower guide»
- Sector: supply chain read-through
- Options: implied move vs historical — post-event vol crush
Common mistake — Long on EPS beat without reading guidance slide — stock −10% on soft outlook.
Example — EPS $1.10 vs $1.05 consensus (beat), but full-year revenue guide −5% vs street flat → gap down at open.
Card
- Sources: press release, 8-K, call transcript.
- Metrics: EPS, revenue, margin guide.
- Read: Financial statements + call sentiment.